Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 14, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Orbital Tracking Corp. | |
Entity Central Index Key | 1,058,307 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 936,519 | |
Trading Symbol | TRKK | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 203,449 | $ 233,326 |
Accounts receivable, net | 189,645 | 294,495 |
Inventory | 475,129 | 332,895 |
Unbilled revenue | 77,507 | 89,515 |
Prepaid expenses | 82,454 | |
Other current assets | 83,904 | 48,213 |
Total current assets | 1,029,634 | 1,080,898 |
Property and equipment, net | 1,585,590 | 1,757,200 |
Intangible assets, net | 206,250 | 225,000 |
Total Assets | 2,821,474 | 3,063,098 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 878,589 | 855,687 |
Deferred revenue | 215,989 | |
Related party payable | 11,540 | 6,998 |
Provision for income taxes | 10,939 | 12,461 |
Liabilities from discontinued operations | 112,397 | 112,397 |
Total current liabilities | 1,013,465 | 1,203,532 |
Total Liabilities | 1,013,465 | 1,203,532 |
Stockholders' Equity: | ||
Common Shares, $0.0001 par value; 750,000,000 shares authorized, 936,519 outstanding as of September 30, 2018 and December 31, 2017, respectively | 94 | 94 |
Additional paid-in capital | 10,946,435 | 10,398,908 |
Accumulated deficit | (9,134,180) | (8,540,715) |
Accumulated other comprehensive loss | (6,024) | (400) |
Total stockholders' equity | 1,808,009 | 1,859,566 |
Total liabilities and stockholders' equity | 2,821,474 | 3,063,098 |
Preferred Series A [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value; 50,000,000 shares authorized | ||
Preferred Series B [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value; 50,000,000 shares authorized | 1 | 1 |
Preferred Series C [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value; 50,000,000 shares authorized | 191 | 191 |
Preferred Series D [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value; 50,000,000 shares authorized | 289 | 289 |
Preferred Series E [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value; 50,000,000 shares authorized | 517 | 517 |
Preferred Series F [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value; 50,000,000 shares authorized | 35 | 35 |
Preferred Series G [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value; 50,000,000 shares authorized | 520 | 520 |
Preferred Series H [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value; 50,000,000 shares authorized | 1 | 1 |
Preferred Series I [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value; 50,000,000 shares authorized | 5 | 5 |
Preferred Series J [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value; 50,000,000 shares authorized | 6 | 4 |
Preferred Series K [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value; 50,000,000 shares authorized | 116 | 116 |
Preferred Series L [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, $0.0001 par value; 50,000,000 shares authorized | $ 3 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Mar. 08, 2018 | Dec. 31, 2017 | Mar. 05, 2016 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 20,000,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | ||
Common stock, shares authorized | 750,000,000 | 750,000,000 | 200,000,000 | |
Common stock, shares issued | 936,519 | 936,519 | ||
Common stock, shares outstanding | 936,519 | 140,224,577 | 936,519 | |
Preferred Series A [Member] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 20,000 | 20,000 | ||
Preferred stock, shares issued | ||||
Preferred stock, shares outstanding | ||||
Preferred Series B [Member] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 30,000 | 30,000 | ||
Preferred stock, shares issued | 3,333 | 3,333 | ||
Preferred stock, shares outstanding | 3,333 | 3,333 | ||
Preferred Series C [Member] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 4,000,000 | 4,000,000 | ||
Preferred stock, shares issued | 1,913,676 | 1,913,676 | ||
Preferred stock, shares outstanding | 1,913,676 | 1,913,676 | ||
Preferred Series D [Member] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||
Preferred stock, shares issued | 2,892,109 | 2,892,109 | ||
Preferred stock, shares outstanding | 2,892,109 | 2,892,109 | ||
Preferred Series E [Member] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 8,746,000 | 8,746,000 | ||
Preferred stock, shares issued | 5,174,200 | 5,174,200 | ||
Preferred stock, shares outstanding | 5,174,200 | 5,174,200 | ||
Preferred Series F [Member] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 1,100,000 | 1,100,000 | ||
Preferred stock, shares issued | 349,999 | 349,999 | ||
Preferred stock, shares outstanding | 349,999 | 349,999 | ||
Preferred Series G [Member] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 10,090,000 | 10,090,000 | ||
Preferred stock, shares issued | 5,202,602 | 5,202,602 | ||
Preferred stock, shares outstanding | 5,202,602 | 5,202,602 | ||
Preferred Series H [Member] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 200,000 | 200,000 | ||
Preferred stock, shares issued | 13,741 | 13,741 | ||
Preferred stock, shares outstanding | 13,741 | 13,741 | ||
Preferred Series I [Member] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 114,944 | 114,944 | ||
Preferred stock, shares issued | 49,110 | 49,110 | ||
Preferred stock, shares outstanding | 49,110 | 49,110 | ||
Preferred Series J [Member] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 125,000 | 125,000 | ||
Preferred stock, shares issued | 64,698 | 64,698 | ||
Preferred stock, shares outstanding | 64,698 | 64,698 | ||
Preferred Series K [Member] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 1,250,000 | 1,250,000 | ||
Preferred stock, shares issued | 1,156,866 | 1,156,866 | ||
Preferred stock, shares outstanding | 1,156,866 | 1,156,866 | ||
Preferred Series L [Member] | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 100,000 | 100,000 | ||
Preferred stock, shares issued | 30,000 | 0 | ||
Preferred stock, shares outstanding | 30,000 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,386,927 | $ 1,588,466 | $ 4,654,507 | $ 4,547,491 |
Cost of sales | 1,140,717 | 1,240,654 | 3,673,128 | 3,589,537 |
Gross profit | 246,210 | 347,812 | 981,379 | 957,954 |
Operating expenses: | ||||
Selling and general administrative | 162,038 | 137,847 | 477,698 | 430,479 |
Salaries, wages and payroll taxes | 200,675 | 178,762 | 566,626 | 513,349 |
Stock based compensation | 47,422 | 47,422 | 600,000 | |
Professional fees | 44,309 | 163,754 | 205,277 | 432,320 |
Depreciation and amortization | 74,943 | 74,143 | 221,656 | 224,319 |
Total operating expenses | 529,387 | 554,506 | 1,518,679 | 2,200,467 |
Loss before other expenses and income taxes | (283,177) | (206,694) | (537,300) | (1,242,513) |
Other (income) expense | ||||
Change in fair value of derivative instruments, net | (1,237) | |||
Interest expense | 10 | 110 | 446 | |
Other expense - Subscription Holders Preferred | 2,308,981 | |||
Foreign currency exchange rate variance | 32,313 | 38,530 | 47,158 | 32,180 |
Total other expense | 32,313 | 38,540 | 47,268 | 2,340,370 |
Net loss before taxes | (315,490) | (245,234) | (584,568) | (3,582,883) |
Income tax expense | 8,897 | 20,465 | 8,897 | 26,456 |
Net loss | (324,387) | (265,699) | (593,465) | (3,609,339) |
Comprehensive Income: | ||||
Net loss | (324,387) | (265,699) | (593,465) | (3,609,339) |
Foreign currency translation adjustments | (13,551) | 18,485 | (5,624) | 32,926 |
Comprehensive loss | $ (337,938) | $ (247,214) | $ (599,089) | $ (3,576,413) |
NET INCOME LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | ||||
Weighted number of common shares outstanding - basic | 936,519 | 484,463 | 847,413 | 293,917 |
Weighted number of common shares outstanding - diluted | 936,519 | 484,463 | 847,413 | 293,917 |
Basic net (loss) per share | $ (0.36) | $ (0.51) | $ (0.71) | $ (12.17) |
Diluted net (loss) per share | $ (0.36) | $ (0.51) | $ (0.71) | $ (12.17) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (593,465) | $ (3,609,339) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Change in fair value of derivative liabilities | 1,237 | |
Depreciation expense | 202,906 | 205,569 |
Amortization of intangible asset | 18,750 | 18,750 |
Preferred stock-based price protection expense | 2,308,981 | |
Provision for income tax expense | 8,897 | 26,456 |
Stock based compensation | 47,422 | 600,000 |
Amortization of prepaid expense in connection with the issuance of common stock issued for prepaid services | 121,096 | |
Imputed interest | 110 | 446 |
Change in operating assets and liabilities: | ||
Accounts receivable | 104,850 | (411,498) |
Inventory | (142,234) | (62,721) |
Unbilled revenue | 12,008 | (11,346) |
Prepaid expense | 82,454 | (101,034) |
Other current assets | (35,691) | (29,827) |
Accounts payable and accrued liabilities | 22,902 | 491,916 |
Deferred revenue | (215,989) | 124,111 |
Net cash used in operating activities | (497,068) | (356,133) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (31,019) | (20,676) |
Net cash used in investing activities | (31,019) | (20,676) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings of note payable, related party, net | 4,542 | 438 |
Proceeds from sale of preferred stock | 500,000 | 500,000 |
Net cash provided by financing activities | 504,542 | 500,438 |
Effect of exchange rate on cash | (6,332) | 29,854 |
Net increase in cash | (29,877) | 153,482 |
Cash beginning of period | 233,326 | 114,733 |
Cash end of period | 203,449 | 268,216 |
Cash paid during the period for | ||
Interest | ||
Income tax | ||
NON CASH FINANCE AND INVESTING ACTIVITY | ||
Preferred stock issued for accounts payable | $ 46,694 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the financial statements not misleading. The consolidated financial statements as of December 31, 2017, have been audited by an independent registered public accounting firm. The accounting policies and procedures employed in the preparation of these condensed consolidated financial statements have been derived from the audited financial statements of the Company for the year ended December 31, 2017, which are contained in Form 10-K as filed with the Securities and Exchange Commission on April 2, 2018. The consolidated balance sheet as of December 31, 2017 was derived from those financial statements. Basis of Presentation and Principles of Consolidation The unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and the rules and regulations of the U.S Securities and Exchange Commission for Interim Financial Information. The unaudited condensed consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2018, and the results of operations and cash flows for the nine months ended September 30, 2018 have been included. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year. Description of Business Orbital Tracking Corp. (the “Company”) was formerly Great West Resources, Inc., a Nevada corporation. The Company, through its wholly owned subsidiaries, Global Telesat Communications Limited (“GTCL”) and Orbital Satcom Corp. (“Orbital Satcom”) is a provider of satellite-based hardware, airtime and related services both in the United States and internationally. The Company’s principal focus is on growing the Company’s existing satellite-based hardware, airtime and related services business line and developing the Company’s own tracking devices for use by retail customers worldwide. On March 28, 2014, the Company merged with and into a wholly-owned subsidiary of the Company (“Great West”) solely for the purpose of changing its state of incorporation to Nevada from Delaware (the “Reincorporation”), effecting a 1:150 reverse split of its common stock, and changing its name to Great West Resources, Inc. in connection with the plans to enter into the business of potash mining and exploration. During late 2014, the Company abandoned its efforts to enter the potash mining and exploration business. All references in the audited consolidated financial statements and notes thereto have been retroactively restated to reflect the reverse stock split of 1:150. On the effective date of the Merger: (a) Each share of the Company’s Common Stock issued and outstanding immediately prior to the effective date changed and converted into 1/150th fully paid and non-assessable shares of Great West Common Stock; (b) Each share of the Company’s Series A Preferred Stock issued and outstanding immediately prior to the effective date changed and converted into 1/150th fully paid and non-assessable shares of the Great West Series A Preferred Stock; (c) Each share of the Company’s Series D Preferred Stock issued and outstanding immediately prior to the effective date changed and converted into 1/150th fully paid and non-assessable shares of the Great West Series B Preferred Stock; (d) All options to purchase shares of the Company’s Common Stock issued and outstanding immediately prior to the effective date changed and converted into equivalent options to purchase 1/150th of a share of Great West Common Stock at an exercise price of $0.0001 per share; (e) All warrants to purchase shares of the Company’s Common Stock issued and outstanding immediately prior to the effective date changed and converted into equivalent warrants to purchase 1/150th of a share of Great West Common Stock at 150 times the exercise price of such converted warrants; and (f) Each share of Great West Common Stock issued and outstanding immediately prior to the Effective Date were canceled and returned to the status of authorized but unissued Great West Common Stock. Global Telesat Communications Limited GTCL For accounting purposes, this transaction was accounted for as a reverse acquisition and has been treated as a recapitalization of the Company with GTCL considered the accounting acquirer, and the financial statements of the accounting acquirer became the financial statements of the registrant. The completion of the Share Exchange resulted in a change of control. The Share Exchange was accounted for as a reverse acquisition and re-capitalization. The GTCL shareholders obtained approximately 39% of voting control on the date of Share Exchange. GTCL was the acquirer for financial reporting purposes and the Company was the acquired company. The consolidated financial statements after the acquisition include the balance sheets of both companies at historical cost, the historical results of GTCL and the results of the Company from the acquisition date. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the recapitalization. See Note 8 - Stockholders Equity. On March 8, 2018, our then-outstanding 140,224,577 shares of common stock outstanding were reduced by a reversed split for a ratio of 1 for 150. As of September 30, 2018, we have 936,519 shares of common stock issued and outstanding post-split. The number of authorized shares of our common stock will not be reduced by the reverse stock split. Accordingly, the reverse Stock split will have the effect of creating additional unissued and unreserved shares of our common stock. All share and per share, information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the reverse split. See Note 8 - Stockholders Equity. Use of Estimates In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses for the years then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the assumptions used to calculate stock-based compensation and common stock issued for services. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with a high credit quality financial institution. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. Accounts receivable and allowance for doubtful accounts The Company has a policy of reserving for questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. As of September 30, 2018, and December 31, 2017, there is an allowance for doubtful accounts of $8,216 and $431. Inventories Inventories are valued at the lower of cost or net realizable value, using the first-in first-out cost method. The Company assesses the valuation of its inventories and reduces the carrying value of those inventories that are obsolete or in excess of the Company’s forecasted usage to their estimated net realizable value. The Company estimates the net realizable value of such inventories based on analysis and assumptions including, but not limited to, historical usage, expected future demand and market requirements. A change to the carrying value of inventories is recorded to cost of goods sold. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory Foreign Currency Translation The Company’s reporting currency is US Dollars. The accounts of one of the Company’s subsidiaries, GTCL, is maintained using the appropriate local currency, (Great British Pound) as the functional currency. All assets and liabilities are translated into U.S. Dollars at balance sheet date, shareholders’ equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are deferred as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) gain. Transaction gains and losses arising from exchange rate fluctuation on transactions denominated in a currency other than the functional currency are included in the statements of operations. The relevant translation rates are as follows: for the three and nine months ended September 30, 2018 closing rate at 1.3036 US$: GBP, quarter average rate at 1.30281 US$: GBP and yearly average rate at 1.3513 US$: GBP. For the three and nine months ended September 30, 2017 closing rate at 1.3399 US$: GBP, average rate at 1.30842 US$: GBP and 1.27500 US$: GBP and, for the year ended 2017 closing rate at 1.350291 US$: GBP, average rate at 1.28819 US$ GBP. Revenue Recognition and Unearned Revenue The Company recognizes revenue from satellite services when earned, as services are rendered or delivered to customers. Equipment sales revenue is recognized when the equipment is delivered to and accepted by the customer. Only equipment sales are subject to warranty. Historically, the Company has not incurred significant expenses for warranties. The Company’s customers generally purchase a combination of our products and services as part of a multiple element arrangement. The Company’s assessment of which revenue recognition guidance is appropriate to account for each element in an arrangement can involve significant judgment. This assessment has a significant impact on the amount and timing of revenue recognition. Revenue is recognized when all of the following criteria have been met: ● Persuasive evidence of an arrangement exists. Contracts and customer purchase orders are generally used to determine the existence of an arrangement. ● Delivery has occurred. Shipping documents and customer acceptance, when applicable, are used to verify delivery. ● The fee is fixed or determinable. We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. ● Collectability is reasonably assured. We assess collectability based primarily on the creditworthiness of the customer as determined by credit checks and analysis, as well as the customer’s payment history. We recognize revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue Recognition,” when there is persuasive evidence that an arrangement exists, title and risk of loss have passed, delivery has occurred, or the services have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. Title and risk of loss generally pass to our customers upon delivery, as we have insurance for lost shipments. In limited circumstances where either title or risk of loss pass upon destination or acceptance or when collection is not reasonably assured, we defer revenue recognition until such events occur. We derive revenues from two primary sources: products and services. Product revenue includes the shipment of product according to the agreement with our customers. Services include mobile telecommunication services, such as airtime usage, messaging, mapping services and customer support (technical support), installations and consulting. A contract may include both product and services. Rarely, contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices are typically estimated based on observable transactions when these services are sold on a standalone basis. The Company provides product warranties with varying lengths of time and terms. The product warranties are considered to be assurance-type in nature and do not cover anything beyond ensuring that the product is functioning as intended. Based on the guidance in ASC 606, assurance-type warranties do not represent separate performance obligations. The Company also sells separately-priced maintenance service contracts which qualify as service-type warranties and represent separate performance obligations. The Company has historically experienced a low rate of product returns under the warranty program. A variety of technical services can be contracted by our customers for a designated period of time. The service contracts allow customers to call the Company for technical support, replace defective parts and to have onsite service provided by the Company’s third-party contract service provider. The Company records revenues for contract services at the amount of the service contract, but such amount is deferred at the beginning of the service term and amortized ratably over the life of the contract. The Company believes that its products and services can be accounted for separately as its products and services have value to the Company’s customers on a stand-alone basis. When a transaction involves more than one product or service, revenue is allocated to each deliverable based on its relative fair value; otherwise, revenue is recognized as products are delivered or as services are provided over the term of the customer contract. Deferred revenue is shown separately in the condensed consolidated balance sheets as current liabilities. At September 30, 2018, we had deferred revenue of approximately $0. At December 31, 2017, we had deferred revenue of approximately $215,989. Cost of Product Sales and Services Cost of sales consists primarily of materials, airtime and overhead costs incurred internally and amounts incurred to contract manufacturers to produce our products, airtime and other implementation costs incurred to install our products and train customer personnel, and customer service and third-party original equipment manufacturer costs to provide continuing support to our customers. There are certain costs which are deferred and recorded as prepaids, until such revenue is recognized. Refer to revenue recognition above as to what constitutes deferred revenue. Shipping and handling costs are included as a component of costs of product sales in the Company’s consolidated statements of operations because the Company includes in revenue the related costs that the Company bills its customers. Intangible assets Intangible assets include customer contracts purchased and recorded based on the cost to acquire them. These assets are amortized over 10 years. Useful lives of intangible assets are periodically evaluated for reasonableness and the assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable. Goodwill and other intangible assets In accordance with ASC 350-30-65, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following: 1. Significant underperformance relative to expected historical or projected future operating results; 2. Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and 3. Significant negative industry or economic trends. When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company did not consider it necessary to record any impairment charges during the nine months ended September 30, 2018 and the year ended December 31, 2017, respectively. Property and Equipment Property and equipment are carried at historical cost less accumulated depreciation. Depreciation is based on the estimated service lives of the depreciable assets and is calculated using the straight-line method. Expenditures that increase the value or productive capacity of assets are capitalized. Fully depreciated assets are retained in the property and equipment, and accumulated depreciation accounts until they are removed from service. When property and equipment are retired, sold or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Repairs and maintenance are expensed as incurred. The estimated useful lives of property and equipment are generally as follows: Years Office furniture and fixtures 4 Computer equipment 4 Rental equipment 4 Appliques 10 Website development 2 Impairment of long-lived assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not consider it necessary to record any impairment charges during the periods ended September 30, 2018 and December 31, 2017, respectively. Fair value of financial instruments The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that require the use of fair value measurements which establishes a framework for measuring fair value and expands disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The Company did not identify any other assets or liabilities that are required to be presented on the condensed consolidated balance sheets at fair value in accordance with the accounting guidance. The carrying amounts reported in the balance sheet for cash, accounts payable, and accrued expenses approximate their estimated fair market value based on the short-term maturity of the instruments. Stock Based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. Income Taxes The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed. Earnings per Common Share Net income (loss) per common share is calculated in accordance with ASC Topic 260: Earnings per Share (“ASC 260”). Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive. In periods where the Company has a net loss, all dilutive securities are excluded. The following are dilutive common stock equivalents during the period ended: September 30, 2018 September 30, 2017 Convertible preferred stock 2,214,729 2,441,383 Stock options exercisable within 60 days 320,042 285,667 Stock warrants 60,000 - Total 2,654,771 2,727,050 Related Party Transactions A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. Reclassifications Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation. These reclassifications had no effect on previously reported results of operations. The Company reclassified certain expense accounts to conform to the currents year’s treatment. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedient In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard was effective for the Company on January 1, 2018. There was no impact as a result of adopting this ASU on the consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. This new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This amendment was effective for the Company on December 15, 2017. There was no impact as a result of adopting this ASU on the consolidated financial statements and related disclosures. On December 22, 2017 the SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of the Tax Cuts and Jobs Act (the TCJA). SAB 118 provides a measurement period that should not extend beyond one year from the enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the TCJA is incomplete but for which they are able to determine a reasonable estimate, it must record a provisional amount in the financial statements. Provisional treatment is proper in light of anticipated additional guidance from various taxing authorities, the SEC, the FASB, and even the Joint Committee on Taxation. If a company cannot determine a provisional amount to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the TCJA. The Company has applied this guidance to its consolidated financial statements. |
Going Concern Considerations
Going Concern Considerations | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern Considerations | NOTE 2 - GOING CONCERN CONSIDERATIONS The accompanying unaudited condensed consolidated financial statements are prepared assuming the Company will continue as a going concern. At September 30, 2018, the Company had an accumulated deficit of approximately $9,134,180, working capital of approximately $16,169 and net loss of approximately $593,465 during the nine months ended September 30, 2018. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent upon obtaining additional capital and financing. Management intends to attempt to raise additional funds by way of a public or private offering. While the Company believes in the viability of its strategy to raise additional funds, there can be no assurances to that effect. The unaudited condensed consolidated financial statements do not include any adjustments relating to classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 3 - INVENTORIES At September 30, 2018 and December 31, 2017, inventories consisted of the following: September 30, 2018 December 31, 2017 Finished goods $ 475,129 $ 332,895 Less reserve for obsolete inventory - - Total $ 475,129 $ 332,895 For the nine months ended September 30, 2018 and the year ended December 31, 2017, the Company did not make any change for reserve for obsolete inventory. |
Prepaid Expenses
Prepaid Expenses | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses | NOTE 4 – PREPAID EXPENSES Prepaid expenses amounted to $0 at September 30, 2018 and $82,454 at December 31, 2017, respectively. Prepaid expenses include prepayments in cash for accounting fees, prepayments in equity instruments, which are being amortized over the terms of their respective agreements, as well as costs associated with certain deferred revenue. For the nine months ended September 30, 2018 and 2017, amortization expense as related to stock-based compensation was $0 and $600,000, respectively. The amortization for prepayment of equity instruments are included in professional fees, as reflected in the accompanying consolidated statements of operations. As of September 30, 2018, and December 31, 2017, all stock-based payments have been fully amortized. Prepaid expenses consist primarily of costs paid for future services which will occur within a year. The amortization of prepayments for deferred revenue are included in cost of sales as incurred. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 5 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following: September 30, 2018 December 31, 2017 Office furniture and fixtures $ 78,650 $ 81,467 Computer equipment 31,303 29,894 Rental equipment 67,588 40,298 Appliques 2,160,096 2,160,096 Website development 23,334 23,776 Less accumulated depreciation (775,381 ) (578,331 ) Total $ 1,585,590 $ 1,757,200 Depreciation expense was $68,693 and $202,906 for the three and nine months ended September 30, 2018, respectively. For the three and nine months ended September 30, 2017, depreciation expense was $67,893 and $205,569, respectively. For the year ended December 31, 2017 depreciation expense was $259,386. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 6 – INTANGIBLE ASSETS On December 10, 2014, the Company entered the satellite voice and data equipment sales and service business through the purchase of certain contracts from Global Telesat Corp., (“GTC”). These contracts permit the Company to utilize the Globalstar, Inc. and Globalstar LLC (collectively, “Globalstar”) mobile satellite voice and data network. The purchase price for the contracts of $250,000 was paid by the Company under an asset purchase agreement by and among the Company, its wholly-owned subsidiary Orbital Satcom, GTC and World Surveillance Group, Inc. Included in the purchased assets are: (i) the rights and benefits granted to GTC under each of the Globalstar Contracts, subject to certain exclusions, (ii) Amortization of customer contracts are included in depreciation and amortization. For the nine months ended September 30, 2018 and 2017, the Company amortized $18,750, respectively. Future amortization of intangible assets is as follows: 2018 6,250 2019 25,000 2020 25,000 2021 25,000 2022 and thereafter 75,000 Total $ 156,250 On February 19, 2015, the Company issued 6,667 of its common stock, par value $0.0001, at $7.50 per share, or $50,000, to a consultant as compensation for the design and delivery of dual mode gsm/Globalstar Simplex tracking devices and related hardware and intellectual property. |
Accounts Payable and Accrued Ot
Accounts Payable and Accrued Other Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Other Liabilities | NOTE 7 - ACCOUNTS PAYABLE AND ACCRUED OTHER LIABILITIES Accounts payable and accrued other liabilities consisted of the following: September 30, 2018 December 31, 2017 Accounts payable $ 631,098 $ 659,285 Rental deposits 43,064 22,303 Customer deposits payable 32,436 27,792 Accrued wages 13,301 10,302 Payroll liabilities 2,899 5,600 Sales tax payable 541 2,017 VAT liability 45,692 34,520 UK corporate tax payable 9,674 - Pre-merger accrued other liabilities 65,948 65,948 Accrued other liabilities 33,936 27,920 Total $ 878,589 $ 855,687 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 8 - STOCKHOLDERS’ EQUITY Capital Structure On March 28, 2014, in connection with the Reincorporation (see Note 1), all share and per share values for all periods presented in the accompanying unaudited condensed consolidated financial statements are retroactively restated for the effect of the Reincorporation. The authorized capital of the Company consists of 750,000,000 shares of common stock, par value $0.0001 per share and 50,000,000 shares of preferred stock, par value $0.0001 per share, as of December 31, 2017. On March 5, 2016, the Company shareholders voted in favor of an amendment to its Articles of Incorporation to increase the total number of shares of authorized capital stock to 800,000,000 shares consisting of (i) 750,000,000 shares of common stock and (ii) 50,000,000 shares of preferred stock from 220,000,000 shares consisting of (i) 200,000,000 shares of common stock and (ii) 20,000,000 shares of preferred stock. Effective March 8, 2018, we conducted a reverse split of our common stock at a ratio of 1 for 150. All share and per share, information in the accompanying condensed consolidated financial statements and footnotes has been retroactively restated to reflect the reverse split. Preferred Stock As of September 30, 2018, there were 50,000,000 shares of Preferred Stock authorized. On December 5, 2017, pursuant to the approval of our board of directors and a majority of the shareholders in each class, we amended the Certificates of Designation for our Series C, D, E, H, I, J, and K Preferred Stock. The amendments changed the conversion rights of these classes of preferred stock such that the Maximum Conversion as defined in each such Certificate of Designation was increased from 4.99% to 9.99% of our outstanding shares of common stock. On May 10, 2018, we issued 20,000 shares of our Series J Preferred Stock at their stated value of $10.00 per share to one investor, for total proceeds of $200,000. Our Series J Preferred Stock is currently convertible to common stock at a price of $1.50 per share and votes on an as-converted basis, subject to certain conversion limitations. On May 11, 2018, we designated a new series of Preferred Stock entitled “Series L Preferred Stock.” Our Series L Preferred Stock consists of 100,000 shares with a stated value of $10.00 per share. Series L Preferred Stock is convertible to common stock at a price of $4.00 per share and votes together with our common stock on an as-converted basis. In addition, on May 14, 2018, we issued a total of 30,000 Units to 3 investors at a price of $10.00 per Unit, for total proceeds of $300,000. Each Unit consists of one (1) share of Series L Preferred Stock and warrants to purchase two (2) shares of common stock at a price of $4.00, exercisable for three years. As of September 30, 2018, there were 20,000 shares of Series A Convertible Preferred Stock authorized and no shares issued and outstanding. As of September 30, 2018, there were 30,000 shares of Series B Convertible Preferred Stock authorized and 3,333 shares issued and outstanding. As of September 30, 2018, there were 4,000,000 shares of Series C Convertible Preferred Stock authorized and 1,913,676 shares issued and outstanding. As of September 30, 2018, there were 5,000,000 shares of Series D Convertible Preferred Stock authorized and 2,892,109 shares issued and outstanding. As of September 30, 2018, there were 8,746,000 shares of Series E Convertible Preferred Stock authorized and 5,174,200 shares issued and outstanding. As of September 30, 2018, there were 1,100,000 shares of Series F shares authorized and 349,999 shares issued and outstanding. As of September 30, 2018, there were 10,090,000 shares of Series G shares authorized and 5,202,602 shares issued and outstanding. As of September 30, 2018, there were 200,000 shares of Series H shares authorized and 13,741 shares issued and outstanding. As of September 30, 2018, there were 114,944 shares of Series I shares authorized and 49,110 shares issued and outstanding. As of September 30, 2018, there were 125,000 shares of Series J shares authorized and 64,698 shares issued and outstanding. As of September 30, 2018, there were 1,250,000 shares of Series K shares authorized and 1,156,866 shares issued and outstanding. As of September 30, 2018, there were 100,000 shares of Series L shares authorized and 30,000 shares issued and outstanding. Common Stock As of September 30, 2018, there were 750,000,000 shares of Common Stock authorized and 936,519 shares issued and outstanding. Stock Options 2018 Incentive Plan On June 14, 2018, our Board of Directors approved the Orbital Tracking Corp. 2018 Incentive Plan (the “Plan”). The 2014 Equity Incentive Plan was closed and superseded by the 2018 Incentive Plan. The purpose of the Plan is to provide a means for the Company to continue to attract, motivate and retain management, key employees, consultants and other independent contractors, and to provide these individuals with greater incentive for their service to the Company by linking their interests in the Company’s success with those of the Company and its shareholders. An Award may also be granted to any consultant, agent, advisor or independent contractor for bona fide services rendered to the Company or any Related Company that; are not in connection with the offer and sale of the Company’s securities in a capital raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s securities. The Plan shall be administered by the Board or its Compensation Committee and may grant Options designated as Incentive Stock Options or Nonqualified Stock Options. The Plan provides that up to a maximum of 1,000,000 shares of the Company’s common stock (subject to adjustment) are available for issuance under the Plan. Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Incentive Stock Option shall not exceed ten years, and in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, shall not exceed five years. Any portion of an Option that is not vested and exercisable on the date of a Participant’s Termination of Service shall expire on such date. In the event of a Change in Control; all outstanding Awards, other than Performance Shares and Performance Units, shall become fully and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, immediately prior to the Change in Control and shall terminate at the effective time of the Change in Control; provided, however, that with respect to a Change in Control that is a Company Transaction, such Awards shall become fully and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, only if and to the extent such Awards are not converted, assumed or replaced by the Successor Company. The exercise price of an Incentive Stock Option shall be at least 100% of the Fair Market Value of the Common Stock on the Grant Date, and in the case of an Incentive Stock Option granted to a Participant who owns more than 10% of the total combined voting power of all classes of the stock of the Company or of its parent or subsidiary corporations (a “Ten Percent Stockholder”), shall not be less than 110% of the Fair Market Value of the Common Stock on the Grant Date. As of September 30, 2018, Mr. David Phipps, is a Ten Percent Stockholder. The determination of more than 10% ownership shall be made in accordance with Section 422 of the Code. To the extent the aggregate Fair Market Value (determined as of the Grant Date) of Common Stock with respect to which a Participant’s Incentive Stock Options become exercisable for the first time during any calendar year (under the Plan and all other stock option plans of the Company and its parent and subsidiary corporations) exceeds $100,000, such portion in excess of $100,000 shall be treated as a Nonqualified Stock Option. On June 14, 2018, we issued 275,000 new stock options to our executives and directors under the 2018 Incentive Plan. All options issued have an exercise price of $1.50 per share, with the exception of David Phipps, a Ten Percent Stockholder, whose exercise price is $1.60, vest in equal quarterly installments starting July 1, 2018 over the next two years and expire on July 1, 2021. For the years ended December 31, 2018, 2019 and 2020, the amount of vested options is 68,750, 137,500 and 68,750, respectively. On July 1, 2018, 34,375 options were fully vested and valued on the vesting date at approximately $1.2816 per option or a total of $47,422 using a Black-Scholes option pricing model with the following assumptions: stock price of $1.50 per share (based on the market price at close on July 1, 2018) volatility of 175%, expected term of 3 years, and a risk-free interest rate of 2.81%. For the nine months ended September 30, 2018, stock-based compensation was $47,422 for the fully vested portion of the stock option grant. The number of options issued to our officers and directors were as follows: Options David Phipps, President, CEO, and Director 100,000 Theresa Carlise, CFO 50,000 Hector Delgado, Director 25,000 In addition, we issued options to purchase a total of 100,000 shares to two key employees. These options have the same terms as those awarded to our officers and directors. Options Issued Outside of Plan On February 19, 2015, the Company issued to Mr. Rector, the former Chief Executive Officer, Chief Financial Officer and director of the Company, a seven-year option to purchase 14,333 shares of common stock as compensation for services provided to the Company. The options have an exercise price of $7.50 per share, were fully vested on the date of grant and shall expire in February 2022. The 14,333 options were valued on the grant date at approximately $7.50 per option or a total of $107,500 using a Black-Scholes option pricing model with the following assumptions: stock price of $7.50 per share (based on the sale of common stock in a private placement), volatility of 380%, expected term of 7 years, and a risk-free interest rate of 1.58%. In connection with the stock option grant, the Company recorded stock-based compensation for the year ended December 31, 2017 of $107,500, respectively. On December 28, 2015, the Company issued Ms. Carlise, Chief Financial Officer, a ten-year option to purchase 3,333 shares of common stock as compensation for services provided to the Company. The options have an exercise price of $7.50 per share, were fully vested on the date of grant and shall expire in December 2025. The 3,333 options were valued on the grant date at approximately $195.02 per option or a total of $650,000 using a Black-Scholes option pricing model with the following assumptions: stock price of $195.00 per share (based on the closing price of the Company’s common stock of the date of issuance), volatility of 992%, expected term of 10 years, and a risk-free interest rate of 1.05%. In connection with the stock option grant, the Company recorded stock-based compensation for the year ended December 31, 2017 of $650,000, respectively. Also, on December 28, 2015, the Company issued Mr. Delgado, its Director, a ten-year option to purchase 1,333 shares of common stock as compensation for services provided to the Company. The options have an exercise price of $7.50 per share, were fully vested on the date of grant and shall expire in December 2025. The 1,333 options were valued on the grant date at approximately $195.02 per option or a total of $260,000 using a Black-Scholes option pricing model with the following assumptions: stock price of $195.02 per share (based on the closing price of the Company’s common stock of the date of issuance), volatility of 992%, expected term of 10 years, and a risk-free interest rate of 1.05%. In connection with the stock option grant, the Company recorded stock-based compensation for the year ended December 31, 2017 of $260,000, respectively. On December 16, 2016, the Company issued options to Mr. Phipps, to purchase up to 66,667 shares of common stock. The options were issued outside of the Company’s 2014 Equity Incentive Plan and are not governed by the 2014 Plan. The options have an exercise price of $1.50 per share, vest immediately, and have a term of ten years. The 66,667 options were valued on the grant date at approximately $2.85 per option or a total of $190,000 using a Black-Scholes option pricing model with the following assumptions: stock price of $2.85 per share (based on the closing price of the Company’s common stock of the date of issuance), volatility of 872%, expected term of 10 years, and a risk-free interest rate of 1.0500%. In connection with the stock option grant, the Company recorded stock-based compensation for the year ended December 31, 2016 of $190,000, respectively On May 26, 2017, the Company issued 33,333 options to Mr. Phipps, 25,000 options to Theresa Carlise, 8,333 options to Hector Delgado, its Director and 133,333 options to certain employees of the Company. The employees are the adult children of our Chief Executive Officer. The options were issued outside of the Company’s 2014 Equity Incentive Plan and are not governed by the 2014 Plan. The options have an exercise price of $1.50 per share, vest immediately, and have a term of ten years. The 200,000 options were valued on the grant date at approximately $3.00 per option or a total of $600,000 using a Black-Scholes option pricing model with the following assumptions: stock price of $3.00 per share (based on the closing price of the Company’s common stock of the date of issuance), volatility of 736%, expected term of 10 years, and a risk-free interest rate of 1.30%. In connection with the stock option grant, the Company recorded stock-based compensation for the year ended December 31, 2017 of $600,000, respectively. Stock options outstanding at September 30, 2018 as disclosed in the below table have approximately $560,667 of intrinsic value at the end of the period. A summary of the status of the Company’s outstanding stock options and changes during the nine months ended September 30, 2018 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at January 1, 2018 285,667 $ 1.90 8.52 Granted 275,000 1.54 2.75 Exercised - - - Forfeited - - - Cancelled - - - Balance outstanding at September 30, 2018 560,667 $ 1.72 5.56 Balance exercisable at September 30, 2018 320,042 1.72 5.56 Weighted average fair value of options granted during the period 275,000 $ 1.54 2.75 Stock Warrants A summary of the status of the Company’s outstanding stock warrants and changes during the nine months ended September 30, 2018 is as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at January 1, 2018 - $ - - Granted 60,000 4.00 2.62 Exercised - - - Forfeited - - - Cancelled - - - Balance outstanding and exercisable at September 30, 2018 60,000 $ 4.00 2.62 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 9 - RELATED PARTY TRANSACTIONS The Company has received financing from the Company’s Chief Executive Officer. No formal repayment terms or arrangements existed prior to February 19, 2015, when as part of the Share Exchange Agreement, the Company entered into a one-year term note with David Phipps where the stockholder loans bear no interest. The note has been extended annually, with the most recent extension dated January 29, 2018, for an additional year to February 19, 2019. The balance of the related party note payable was $0, as of September 30, 2018. The accounts payable due to related party includes advances for inventory and services due to David Phipps of $11,540. Total payments due to David Phipps as of September 30, 2018 and December 31, 2017 are $11,540 and $6,998, respectively. The Company employs two individuals who are related to Mr. Phipps, of which earned gross wages totaled $54,803 for the nine months ended September 30, 2018. For the nine months ended September 30, 2017, the Company employed two individuals who were related to Mr. Phipps of which earned gross wages of $50,406. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10 - COMMITMENTS AND CONTINGENCIES Employment Agreements On June 14, 2018, the Company entered into a two (2) year Employment Agreement (“Agreement”) with Mr. Phipps, with an automatic one (1) year extension. Under the Agreement, Mr. Phipps will serve as the Company’s Chief Executive Officer and President and will receive an annual base salary equal to the sum of $170,000 and £48,000 to be paid through our operating subsidiary, Global Telesat Communications, Ltd. For the nine months ended September 30, 2018, the £48,000 equivalent to USD is $64,862 and the yearly conversion rate is 1.35130. The agreement provides for a performance bonus based on exceeding our annual revenue goals and on our ability to attract new investment. The Agreement also provides for medical plan coverage, an auto allowance, paid vacation, and discretionary stock grants and option awards. In the event of termination without cause, termination as a result of a change in control, or resignation with good reason (as defined in the Agreement), Mr. Phipps will be entitled to a severance equal to twice his base salary, the immediate vesting of all unvested options, and other benefits. The Agreement terminates and supersedes the Original Agreements and any subsequent amendments, effective as of the June 14, 2018. Also, on June 14, 2018, we entered into a new Employment Agreement, (“Agreement”) with our Chief Financial Officer, Theresa Carlise. The Agreement is for a period of two (2) years, with an automatic one (1) year extension. Ms. Carlise’s base salary is $150,000 per year. The Agreement provides for performance bonuses based on exceeding our annual revenue goals and on our ability to attract new investment. The Agreement also provides for medical plan coverage, an auto allowance, paid vacation, and discretionary stock grants and option awards. In the event of termination without cause, termination as a result of a change in control, or resignation with good reason (as defined in the Agreements), Ms. Carlise will be entitled to a severance equal to twice her base salary, the immediate vesting of all unvested options, and other benefits. The Agreement terminates and supersedes the Original Agreements and any subsequent amendments, effective as of the June 14, 2018. Consulting Agreement On July 7, 2017, the Company entered into an agreement with Viewtrade Securities Inc. to assist in effectuating a securities offering of $5,000,000 to $7,000,000. The agreement is now expired, and the Company’s related registration statement has been withdrawn prior to effectiveness. Litigation From time to time, the Company may become involved in litigation relating to claims arising out of our operations in the normal course of business. The Company is not currently involved in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which the Company is a party or to which any of the Company’s properties is subject, which would reasonably be likely to have a material adverse effect on the Company’s business, financial condition and operating results. |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentrations | NOTE 11 - CONCENTRATIONS Customers: No customer accounted for 10% or more of the Company’s revenues during the nine months ended September 30, 2018 and 2017. Suppliers: The following table sets forth information as to each supplier that accounted for 10% or more of the Company’s purchases for the nine months ended September 30, 2018 and 2017. September 30, 2018 September 30, 2017 Cyngus Telecom $ 385,944 11.1 % $ 357,846 9.7 % Globalstar Europe $ 375,148 10.8 % $ 489,026 13.3 % Garmin $ 479,717 13.8 % $ 444,345 12.0 % Network Innovations $ 1,452,677 41.7 % $ 1,468,253 39.8 % Geographic The following table sets forth revenue as to each geographic location, for the three and nine months ended September 30, 2018 and 2017. Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Europe $ 956,187 68.9 % $ 1,077,011 63.4 % $ 3,155,339 67.8 % $ 2,879,564 63.3 % North America $ 295,239 21.3 % $ 468,700 29.5 % $ 940,375 20.2 % $ 1,175,554 25.9 % South America $ 58,296 4.2 % $ 46,075 2.9 % $ 307,229 6.6 % $ 263,187 5.8 % Arab States $ 4,095 0.3 % $ 2,511 0.2 % $ 10,241 0.2 % $ 17,701 0.4 % Asia & Pacific $ 61,643 4.4 % $ 59,340 3.7 % $ 197,013 4.2 % $ 192,465 4.2 % Africa $ 11,467 0.8 % $ 4,829 0.3 % $ 44,311 1.0 % $ 19,020 0.4 % $ 1,386,927 $ 1,588,466 $ 4,654,507 $ 4,547,491 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 12 - SUBSEQUENT EVENTS The Company does not have any subsequent events to be disclosed prior to this filing. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and the rules and regulations of the U.S Securities and Exchange Commission for Interim Financial Information. The unaudited condensed consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2018, and the results of operations and cash flows for the nine months ended September 30, 2018 have been included. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year. |
Description of Business | Description of Business Orbital Tracking Corp. (the “Company”) was formerly Great West Resources, Inc., a Nevada corporation. The Company, through its wholly owned subsidiaries, Global Telesat Communications Limited (“GTCL”) and Orbital Satcom Corp. (“Orbital Satcom”) is a provider of satellite-based hardware, airtime and related services both in the United States and internationally. The Company’s principal focus is on growing the Company’s existing satellite-based hardware, airtime and related services business line and developing the Company’s own tracking devices for use by retail customers worldwide. On March 28, 2014, the Company merged with and into a wholly-owned subsidiary of the Company (“Great West”) solely for the purpose of changing its state of incorporation to Nevada from Delaware (the “Reincorporation”), effecting a 1:150 reverse split of its common stock, and changing its name to Great West Resources, Inc. in connection with the plans to enter into the business of potash mining and exploration. During late 2014, the Company abandoned its efforts to enter the potash mining and exploration business. All references in the audited consolidated financial statements and notes thereto have been retroactively restated to reflect the reverse stock split of 1:150. On the effective date of the Merger: (a) Each share of the Company’s Common Stock issued and outstanding immediately prior to the effective date changed and converted into 1/150th fully paid and non-assessable shares of Great West Common Stock; (b) Each share of the Company’s Series A Preferred Stock issued and outstanding immediately prior to the effective date changed and converted into 1/150th fully paid and non-assessable shares of the Great West Series A Preferred Stock; (c) Each share of the Company’s Series D Preferred Stock issued and outstanding immediately prior to the effective date changed and converted into 1/150th fully paid and non-assessable shares of the Great West Series B Preferred Stock; (d) All options to purchase shares of the Company’s Common Stock issued and outstanding immediately prior to the effective date changed and converted into equivalent options to purchase 1/150th of a share of Great West Common Stock at an exercise price of $0.0001 per share; (e) All warrants to purchase shares of the Company’s Common Stock issued and outstanding immediately prior to the effective date changed and converted into equivalent warrants to purchase 1/150th of a share of Great West Common Stock at 150 times the exercise price of such converted warrants; and (f) Each share of Great West Common Stock issued and outstanding immediately prior to the Effective Date were canceled and returned to the status of authorized but unissued Great West Common Stock. Global Telesat Communications Limited GTCL For accounting purposes, this transaction was accounted for as a reverse acquisition and has been treated as a recapitalization of the Company with GTCL considered the accounting acquirer, and the financial statements of the accounting acquirer became the financial statements of the registrant. The completion of the Share Exchange resulted in a change of control. The Share Exchange was accounted for as a reverse acquisition and re-capitalization. The GTCL shareholders obtained approximately 39% of voting control on the date of Share Exchange. GTCL was the acquirer for financial reporting purposes and the Company was the acquired company. The consolidated financial statements after the acquisition include the balance sheets of both companies at historical cost, the historical results of GTCL and the results of the Company from the acquisition date. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the recapitalization. See Note 8 - Stockholders Equity. On March 8, 2018, our then-outstanding 140,224,577 shares of common stock outstanding were reduced by a reversed split for a ratio of 1 for 150. As of September 30, 2018, we have 936,519 shares of common stock issued and outstanding post-split. The number of authorized shares of our common stock will not be reduced by the reverse stock split. Accordingly, the reverse Stock split will have the effect of creating additional unissued and unreserved shares of our common stock. All share and per share, information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the reverse split. See Note 8 - Stockholders Equity. |
Use of Estimates | Use of Estimates In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses for the years then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the assumptions used to calculate stock-based compensation and common stock issued for services. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with a high credit quality financial institution. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable and allowance for doubtful accounts The Company has a policy of reserving for questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. As of September 30, 2018, and December 31, 2017, there is an allowance for doubtful accounts of $8,216 and $431. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value, using the first-in first-out cost method. The Company assesses the valuation of its inventories and reduces the carrying value of those inventories that are obsolete or in excess of the Company’s forecasted usage to their estimated net realizable value. The Company estimates the net realizable value of such inventories based on analysis and assumptions including, but not limited to, historical usage, expected future demand and market requirements. A change to the carrying value of inventories is recorded to cost of goods sold. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory |
Foreign Currency Translation | Foreign Currency Translation The Company’s reporting currency is US Dollars. The accounts of one of the Company’s subsidiaries, GTCL, is maintained using the appropriate local currency, (Great British Pound) as the functional currency. All assets and liabilities are translated into U.S. Dollars at balance sheet date, shareholders’ equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are deferred as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) gain. Transaction gains and losses arising from exchange rate fluctuation on transactions denominated in a currency other than the functional currency are included in the statements of operations. The relevant translation rates are as follows: for the three and nine months ended September 30, 2018 closing rate at 1.3036 US$: GBP, quarter average rate at 1.30281 US$: GBP and yearly average rate at 1.3513 US$: GBP. For the three and nine months ended September 30, 2017 closing rate at 1.3399 US$: GBP, average rate at 1.30842 US$: GBP and 1.27500 US$: GBP and, for the year ended 2017 closing rate at 1.350291 US$: GBP, average rate at 1.28819 US$ GBP. |
Revenue Recognition and Unearned Revenue | Revenue Recognition and Unearned Revenue The Company recognizes revenue from satellite services when earned, as services are rendered or delivered to customers. Equipment sales revenue is recognized when the equipment is delivered to and accepted by the customer. Only equipment sales are subject to warranty. Historically, the Company has not incurred significant expenses for warranties. The Company’s customers generally purchase a combination of our products and services as part of a multiple element arrangement. The Company’s assessment of which revenue recognition guidance is appropriate to account for each element in an arrangement can involve significant judgment. This assessment has a significant impact on the amount and timing of revenue recognition. Revenue is recognized when all of the following criteria have been met: ● Persuasive evidence of an arrangement exists. Contracts and customer purchase orders are generally used to determine the existence of an arrangement. ● Delivery has occurred. Shipping documents and customer acceptance, when applicable, are used to verify delivery. ● The fee is fixed or determinable. We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. ● Collectability is reasonably assured. We assess collectability based primarily on the creditworthiness of the customer as determined by credit checks and analysis, as well as the customer’s payment history. We recognize revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue Recognition,” when there is persuasive evidence that an arrangement exists, title and risk of loss have passed, delivery has occurred, or the services have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. Title and risk of loss generally pass to our customers upon delivery, as we have insurance for lost shipments. In limited circumstances where either title or risk of loss pass upon destination or acceptance or when collection is not reasonably assured, we defer revenue recognition until such events occur. We derive revenues from two primary sources: products and services. Product revenue includes the shipment of product according to the agreement with our customers. Services include mobile telecommunication services, such as airtime usage, messaging, mapping services and customer support (technical support), installations and consulting. A contract may include both product and services. Rarely, contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices are typically estimated based on observable transactions when these services are sold on a standalone basis. The Company provides product warranties with varying lengths of time and terms. The product warranties are considered to be assurance-type in nature and do not cover anything beyond ensuring that the product is functioning as intended. Based on the guidance in ASC 606, assurance-type warranties do not represent separate performance obligations. The Company also sells separately-priced maintenance service contracts which qualify as service-type warranties and represent separate performance obligations. The Company has historically experienced a low rate of product returns under the warranty program. A variety of technical services can be contracted by our customers for a designated period of time. The service contracts allow customers to call the Company for technical support, replace defective parts and to have onsite service provided by the Company’s third-party contract service provider. The Company records revenues for contract services at the amount of the service contract, but such amount is deferred at the beginning of the service term and amortized ratably over the life of the contract. The Company believes that its products and services can be accounted for separately as its products and services have value to the Company’s customers on a stand-alone basis. When a transaction involves more than one product or service, revenue is allocated to each deliverable based on its relative fair value; otherwise, revenue is recognized as products are delivered or as services are provided over the term of the customer contract. Deferred revenue is shown separately in the condensed consolidated balance sheets as current liabilities. At September 30, 2018, we had deferred revenue of approximately $0. At December 31, 2017, we had deferred revenue of approximately $215,989. |
Cost of Product Sales and Services | Cost of Product Sales and Services Cost of sales consists primarily of materials, airtime and overhead costs incurred internally and amounts incurred to contract manufacturers to produce our products, airtime and other implementation costs incurred to install our products and train customer personnel, and customer service and third-party original equipment manufacturer costs to provide continuing support to our customers. There are certain costs which are deferred and recorded as prepaids, until such revenue is recognized. Refer to revenue recognition above as to what constitutes deferred revenue. Shipping and handling costs are included as a component of costs of product sales in the Company’s consolidated statements of operations because the Company includes in revenue the related costs that the Company bills its customers. |
Intangible Assets | Intangible assets Intangible assets include customer contracts purchased and recorded based on the cost to acquire them. These assets are amortized over 10 years. Useful lives of intangible assets are periodically evaluated for reasonableness and the assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable. |
Goodwill and Other Intangible Assets | Goodwill and other intangible assets In accordance with ASC 350-30-65, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following: 1. Significant underperformance relative to expected historical or projected future operating results; 2. Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and 3. Significant negative industry or economic trends. When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company did not consider it necessary to record any impairment charges during the nine months ended September 30, 2018 and the year ended December 31, 2017, respectively. |
Property and Equipment | Property and Equipment Property and equipment are carried at historical cost less accumulated depreciation. Depreciation is based on the estimated service lives of the depreciable assets and is calculated using the straight-line method. Expenditures that increase the value or productive capacity of assets are capitalized. Fully depreciated assets are retained in the property and equipment, and accumulated depreciation accounts until they are removed from service. When property and equipment are retired, sold or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Repairs and maintenance are expensed as incurred. The estimated useful lives of property and equipment are generally as follows: Years Office furniture and fixtures 4 Computer equipment 4 Rental equipment 4 Appliques 10 Website development 2 |
Impairment of Long-Lived Assets | Impairment of long-lived assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not consider it necessary to record any impairment charges during the periods ended September 30, 2018 and December 31, 2017, respectively. |
Fair Value of Financial Instruments | Fair value of financial instruments The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that require the use of fair value measurements which establishes a framework for measuring fair value and expands disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The Company did not identify any other assets or liabilities that are required to be presented on the condensed consolidated balance sheets at fair value in accordance with the accounting guidance. The carrying amounts reported in the balance sheet for cash, accounts payable, and accrued expenses approximate their estimated fair market value based on the short-term maturity of the instruments. |
Stock Based Compensation | Stock Based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. |
Income Taxes | Income Taxes The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed. |
Earnings Per Common Share | Earnings per Common Share Net income (loss) per common share is calculated in accordance with ASC Topic 260: Earnings per Share (“ASC 260”). Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive. In periods where the Company has a net loss, all dilutive securities are excluded. The following are dilutive common stock equivalents during the period ended: September 30, 2018 September 30, 2017 Convertible preferred stock 2,214,729 2,441,383 Stock options exercisable within 60 days 320,042 285,667 Stock warrants 60,000 - Total 2,654,771 2,727,050 |
Related Party Transactions | Related Party Transactions A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation. These reclassifications had no effect on previously reported results of operations. The Company reclassified certain expense accounts to conform to the currents year’s treatment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedient In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard was effective for the Company on January 1, 2018. There was no impact as a result of adopting this ASU on the consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. This new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This amendment was effective for the Company on December 15, 2017. There was no impact as a result of adopting this ASU on the consolidated financial statements and related disclosures. On December 22, 2017 the SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of the Tax Cuts and Jobs Act (the TCJA). SAB 118 provides a measurement period that should not extend beyond one year from the enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the TCJA is incomplete but for which they are able to determine a reasonable estimate, it must record a provisional amount in the financial statements. Provisional treatment is proper in light of anticipated additional guidance from various taxing authorities, the SEC, the FASB, and even the Joint Committee on Taxation. If a company cannot determine a provisional amount to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the TCJA. The Company has applied this guidance to its consolidated financial statements. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Life of Property and Equipment | The estimated useful lives of property and equipment are generally as follows: Years Office furniture and fixtures 4 Computer equipment 4 Rental equipment 4 Appliques 10 Website development 2 |
Schedule of Dilutive Common Stock Equivalents | The following are dilutive common stock equivalents during the period ended: September 30, 2018 September 30, 2017 Convertible preferred stock 2,214,729 2,441,383 Stock options exercisable within 60 days 320,042 285,667 Stock warrants 60,000 - Total 2,654,771 2,727,050 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | At September 30, 2018 and December 31, 2017, inventories consisted of the following: September 30, 2018 December 31, 2017 Finished goods $ 475,129 $ 332,895 Less reserve for obsolete inventory - - Total $ 475,129 $ 332,895 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: September 30, 2018 December 31, 2017 Office furniture and fixtures $ 78,650 $ 81,467 Computer equipment 31,303 29,894 Rental equipment 67,588 40,298 Appliques 2,160,096 2,160,096 Website development 23,334 23,776 Less accumulated depreciation (775,381 ) (578,331 ) Total $ 1,585,590 $ 1,757,200 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Future Amortization of Intangible Assets | Future amortization of intangible assets is as follows: 2018 6,250 2019 25,000 2020 25,000 2021 25,000 2022 and thereafter 75,000 Total $ 156,250 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Other Liabilities | Accounts payable and accrued other liabilities consisted of the following: September 30, 2018 December 31, 2017 Accounts payable $ 631,098 $ 659,285 Rental deposits 43,064 22,303 Customer deposits payable 32,436 27,792 Accrued wages 13,301 10,302 Payroll liabilities 2,899 5,600 Sales tax payable 541 2,017 VAT liability 45,692 34,520 UK corporate tax payable 9,674 - Pre-merger accrued other liabilities 65,948 65,948 Accrued other liabilities 33,936 27,920 Total $ 878,589 $ 855,687 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Stock Option Issued for Related Parties | The number of options issued to our officers and directors were as follows: Options David Phipps, President, CEO, and Director 100,000 Theresa Carlise, CFO 50,000 Hector Delgado, Director 25,000 |
Schedule of Outstanding Stock Options Activities | A summary of the status of the Company’s outstanding stock options and changes during the nine months ended September 30, 2018 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at January 1, 2018 285,667 $ 1.90 8.52 Granted 275,000 1.54 2.75 Exercised - - - Forfeited - - - Cancelled - - - Balance outstanding at September 30, 2018 560,667 $ 1.72 5.56 Balance exercisable at September 30, 2018 320,042 1.72 5.56 Weighted average fair value of options granted during the period 275,000 $ 1.54 2.75 |
Schedule of Outstanding Stock Warrants Activities | A summary of the status of the Company’s outstanding stock warrants and changes during the nine months ended September 30, 2018 is as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at January 1, 2018 - $ - - Granted 60,000 4.00 2.62 Exercised - - - Forfeited - - - Cancelled - - - Balance outstanding and exercisable at September 30, 2018 60,000 $ 4.00 2.62 |
Concentrations (Tables)
Concentrations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Schedule of Concentration Risk | The following table sets forth information as to each supplier that accounted for 10% or more of the Company’s purchases for the nine months ended September 30, 2018 and 2017. September 30, 2018 September 30, 2017 Cyngus Telecom $ 385,944 11.1 % $ 357,846 9.7 % Globalstar Europe $ 375,148 10.8 % $ 489,026 13.3 % Garmin $ 479,717 13.8 % $ 444,345 12.0 % Network Innovations $ 1,452,677 41.7 % $ 1,468,253 39.8 % |
Schedule of Revenue from Each Geographic Location | The following table sets forth revenue as to each geographic location, for the three and nine months ended September 30, 2018 and 2017. Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Europe $ 956,187 68.9 % $ 1,077,011 63.4 % $ 3,155,339 67.8 % $ 2,879,564 63.3 % North America $ 295,239 21.3 % $ 468,700 29.5 % $ 940,375 20.2 % $ 1,175,554 25.9 % South America $ 58,296 4.2 % $ 46,075 2.9 % $ 307,229 6.6 % $ 263,187 5.8 % Arab States $ 4,095 0.3 % $ 2,511 0.2 % $ 10,241 0.2 % $ 17,701 0.4 % Asia & Pacific $ 61,643 4.4 % $ 59,340 3.7 % $ 197,013 4.2 % $ 192,465 4.2 % Africa $ 11,467 0.8 % $ 4,829 0.3 % $ 44,311 1.0 % $ 19,020 0.4 % $ 1,386,927 $ 1,588,466 $ 4,654,507 $ 4,547,491 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) | Mar. 08, 2018shares | Mar. 28, 2014 | Sep. 30, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)shares | Sep. 30, 2017 |
Reverse stock split | reversed split for a ratio of 1 for 150 | reverse stock split of 1:150 | reverse split of our common stock at a ratio of 1 for 150 | ||
Share issued price per share | $ / shares | $ 0.0001 | ||||
Voting rights percentage | 39.00% | ||||
Common stock shares outstanding | shares | 140,224,577 | 936,519 | 936,519 | ||
Common stock shares issued | shares | 936,519 | 936,519 | |||
Cash insured by FDIC | $ 250,000 | ||||
Allowance for doubtful accounts receivable | 8,216 | $ 431 | |||
Deferred revenue | 215,989 | ||||
Intangible asset, amortization period | 10 years | ||||
Asset impairment charges | |||||
Tax benefit, description | more than 50 percent | ||||
US$: GBP [Member] | Closing Rate [Member] | |||||
Foreign currency translation rate | 1.3036 | 1.350291 | 1.3399 | ||
US$: GBP [Member] | Average Rate [Member] | |||||
Foreign currency translation rate | 1.30281 | 1.28819 | 1.30842 | ||
US$: GBP [Member] | Yearly Average Rate [Member] | |||||
Foreign currency translation rate | 1.3513 | 1.27500 | |||
Great West Resources, Inc. [Member] | |||||
Reverse stock split | effecting a 1:150 reverse split |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Estimated Useful Life of Property and Equipment (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Office Furniture and Fixtures [Member] | |
Estimated useful life | 4 years |
Computer Equipment [Member] | |
Estimated useful life | 4 years |
Rental Equipment [Member] | |
Estimated useful life | 4 years |
Appliques [Member] | |
Estimated useful life | 10 years |
Website Development [Member] | |
Estimated useful life | 2 years |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Dilutive Common Stock Equivalents (Details) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Dilutive common stock equivalents | 2,654,771 | 2,727,050 |
Convertible Preferred Stock [Member] | ||
Dilutive common stock equivalents | 2,214,729 | 2,441,383 |
Stock Option [Member] | ||
Dilutive common stock equivalents | 320,042 | 285,667 |
Stock Warrant [Member] | ||
Dilutive common stock equivalents | 60,000 |
Going Concern Considerations (D
Going Concern Considerations (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Accumulated deficit | $ 9,134,180 | $ 9,134,180 | $ 8,540,715 | ||
Working capital | 16,169 | 16,169 | |||
Net loss | $ 324,387 | $ 265,699 | $ 593,465 | $ 3,609,339 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 475,129 | $ 332,895 |
Less reserve for obsolete inventory | ||
Total | $ 475,129 | $ 332,895 |
Prepaid Expenses (Details Narra
Prepaid Expenses (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid expenses | $ 82,454 | ||
Amortization expense | $ 0 | $ 600,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||||
Depreciation expense | $ 68,693 | $ 67,893 | $ 202,906 | $ 205,569 | $ 259,386 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Office furniture and fixtures | $ 78,650 | $ 81,467 |
Computer equipment | 31,303 | 29,894 |
Rental equipment | 67,588 | 40,298 |
Appliques | 2,160,096 | 2,160,096 |
Website development | 23,334 | 23,776 |
Less accumulated depreciation | (775,381) | (578,331) |
Total | $ 1,585,590 | $ 1,757,200 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | Feb. 19, 2015 | Dec. 10, 2014 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Amortization expense | $ 18,750 | $ 18,750 | |||
Common stock par value | $ 0.0001 | $ 0.0001 | |||
Share issued price per share | $ 0.0001 | ||||
Contracts [Member] | |||||
Intangible asset purchase value | $ 250,000 | ||||
Consultant [Member] | |||||
Number of common stock issued | 6,667 | ||||
Common stock par value | $ 0.0001 | ||||
Share issued price per share | $ 7.50 | ||||
Number of common stock issued, value | $ 50,000 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Future Amortization of Intangible Assets (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Total | $ 206,250 | $ 225,000 |
Intangible Assets [Member] | ||
2,018 | 6,250 | |
2,019 | 25,000 | |
2,020 | 25,000 | |
2,021 | 25,000 | |
2022 and thereafter | 75,000 | |
Total | $ 156,250 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Other Liabilities - Schedule of Accounts Payable and Accrued Other Liabilities (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 631,098 | $ 659,285 |
Rental deposits | 43,064 | 22,303 |
Customer deposits payable | 32,436 | 27,792 |
Accrued wages | 13,301 | 10,302 |
Payroll liabilities | 2,899 | 5,600 |
Sales tax payable | 541 | 2,017 |
VAT liability | 45,692 | 34,520 |
UK corporate tax payable | 9,674 | |
Pre-merger accrued other liabilities | 65,948 | 65,948 |
Accrued other liabilities | 33,936 | 27,920 |
Total | $ 878,589 | $ 855,687 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Jun. 14, 2018 | May 14, 2018 | May 11, 2018 | May 10, 2018 | Mar. 08, 2018 | May 26, 2017 | Dec. 16, 2016 | Dec. 28, 2015 | Feb. 19, 2015 | Mar. 28, 2014 | Jul. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 05, 2017 | Mar. 05, 2016 |
Common stock, shares authorized | 750,000,000 | 750,000,000 | 750,000,000 | 200,000,000 | |||||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 20,000,000 | |||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Authorized capital | 220,000,000 | ||||||||||||||||||
Reverse split | reversed split for a ratio of 1 for 150 | reverse stock split of 1:150 | reverse split of our common stock at a ratio of 1 for 150 | ||||||||||||||||
Proceeds from issuance of preferred stock | $ 500,000 | $ 500,000 | |||||||||||||||||
Common stock, shares issued | 936,519 | 936,519 | 936,519 | ||||||||||||||||
Common stock, shares outstanding | 140,224,577 | 936,519 | 936,519 | 936,519 | |||||||||||||||
Stock based compensation | $ 47,422 | $ 47,422 | $ 600,000 | ||||||||||||||||
Number of stock options granted during the period | 275,000 | ||||||||||||||||||
Grant exercise price | $ 1.54 | ||||||||||||||||||
Stock option outstanding intrinsic value | $ 560,667 | ||||||||||||||||||
2018 Incentive Plan [Member] | |||||||||||||||||||
Maximum number of shares of common stock are available for issuance | 1,000,000 | ||||||||||||||||||
Stock based compensation description | The exercise price of an Incentive Stock Option shall be at least 100% of the Fair Market Value of the Common Stock on the Grant Date, and in the case of an Incentive Stock Option granted to a Participant who owns more than 10% of the total combined voting power of all classes of the stock of the Company or of its parent or subsidiary corporations (a "Ten Percent Stockholder"), shall not be less than 110% of the Fair Market Value of the Common Stock on the Grant Date. As of September 30, 2018, Mr. David Phipps, is a Ten Percent Stockholder. The determination of more than 10% ownership shall be made in accordance with Section 422 of the Code. To the extent the aggregate Fair Market Value (determined as of the Grant Date) of Common Stock with respect to which a Participant's Incentive Stock Options become exercisable for the first time during any calendar year (under the Plan and all other stock option plans of the Company and its parent and subsidiary corporations) exceeds $100,000, such portion in excess of $100,000 shall be treated as a Nonqualified Stock Option. | ||||||||||||||||||
Number of new stock options issued during the period | 275,000 | ||||||||||||||||||
Stock option exercise price per share | $ 1.50 | ||||||||||||||||||
Number of stock options vesting during the period, value | $ 47,422 | ||||||||||||||||||
Number of stock options vesting during the period | 34,375 | ||||||||||||||||||
Number of stock options vesting during the period, value per option | $ 1.2816 | ||||||||||||||||||
Purchase price per share | $ 1.50 | ||||||||||||||||||
Fair value assumptions, expected volatility rate | 175.00% | ||||||||||||||||||
Fair value assumptions, expected term | 3 years | ||||||||||||||||||
Fair value assumptions, expected risk free interest rate | 2.81% | ||||||||||||||||||
2018 Incentive Plan [Member] | Tranche One [Member] | |||||||||||||||||||
Number of stock options vesting during the period, value | $ 68,750 | ||||||||||||||||||
2018 Incentive Plan [Member] | Tranche Two [Member] | |||||||||||||||||||
Number of stock options vesting during the period, value | 137,500 | ||||||||||||||||||
2018 Incentive Plan [Member] | Tranche Three [Member] | |||||||||||||||||||
Number of stock options vesting during the period, value | $ 68,750 | ||||||||||||||||||
2014 Equity Incentive Plan [Member] | |||||||||||||||||||
Stock based compensation | 600,000 | ||||||||||||||||||
Stock Option [Member] | |||||||||||||||||||
Stock option exercise price per share | $ 1.50 | ||||||||||||||||||
Purchase price per share | $ 3 | ||||||||||||||||||
Fair value assumptions, expected volatility rate | 736.00% | ||||||||||||||||||
Fair value assumptions, expected term | 10 years | ||||||||||||||||||
Fair value assumptions, expected risk free interest rate | 1.30% | ||||||||||||||||||
Stock option term | 10 years | ||||||||||||||||||
Number of stock options granted during the period | 200,000 | ||||||||||||||||||
Grant exercise price | $ 3 | ||||||||||||||||||
Stock option granted value | $ 600,000 | ||||||||||||||||||
Board of Directors [Member] | Certificate of Designation [Member] | Minimum [Member] | |||||||||||||||||||
Maximum conversion outstanding shares of common stock | 4.99% | ||||||||||||||||||
Board of Directors [Member] | Certificate of Designation [Member] | Maximum [Member] | |||||||||||||||||||
Maximum conversion outstanding shares of common stock | 9.99% | ||||||||||||||||||
David Phipps [Member] | 2018 Incentive Plan [Member] | |||||||||||||||||||
Stock option exercise price per share | $ 1.60 | ||||||||||||||||||
Two Key Employees [Member] | 2018 Incentive Plan [Member] | |||||||||||||||||||
Stock option to purchase of shares of common stock as compensation for services provided | 100,000 | ||||||||||||||||||
Mr. Rector [Member] | 2014 Equity Incentive Plan [Member] | |||||||||||||||||||
Stock option exercise price per share | $ 7.50 | ||||||||||||||||||
Purchase price per share | $ 7.50 | ||||||||||||||||||
Fair value assumptions, expected volatility rate | 380.00% | ||||||||||||||||||
Fair value assumptions, expected term | 7 years | ||||||||||||||||||
Fair value assumptions, expected risk free interest rate | 1.58% | ||||||||||||||||||
Stock based compensation | 107,500 | ||||||||||||||||||
Stock option to purchase of shares of common stock as compensation for services provided | 14,333 | ||||||||||||||||||
Stock option term | 7 years | ||||||||||||||||||
Stock option expire date | Feb. 28, 2022 | ||||||||||||||||||
Number of stock options granted during the period | 14,333 | ||||||||||||||||||
Grant exercise price | $ 7.50 | ||||||||||||||||||
Stock option granted value | $ 107,500 | ||||||||||||||||||
Mr. Carlise [Member] | 2014 Equity Incentive Plan [Member] | |||||||||||||||||||
Stock option exercise price per share | $ 7.50 | ||||||||||||||||||
Purchase price per share | $ 195 | ||||||||||||||||||
Fair value assumptions, expected volatility rate | 992.00% | ||||||||||||||||||
Fair value assumptions, expected term | 10 years | ||||||||||||||||||
Fair value assumptions, expected risk free interest rate | 1.05% | ||||||||||||||||||
Stock based compensation | 650,000 | ||||||||||||||||||
Stock option to purchase of shares of common stock as compensation for services provided | 3,333 | ||||||||||||||||||
Stock option term | 10 years | ||||||||||||||||||
Stock option expire date | Dec. 31, 2025 | ||||||||||||||||||
Number of stock options granted during the period | 3,333 | ||||||||||||||||||
Grant exercise price | $ 195.02 | ||||||||||||||||||
Stock option granted value | $ 650,000 | ||||||||||||||||||
Mr. Delgado [Member] | 2014 Equity Incentive Plan [Member] | |||||||||||||||||||
Stock option exercise price per share | $ 7.50 | ||||||||||||||||||
Purchase price per share | $ 195.02 | ||||||||||||||||||
Fair value assumptions, expected volatility rate | 992.00% | ||||||||||||||||||
Fair value assumptions, expected term | 10 years | ||||||||||||||||||
Fair value assumptions, expected risk free interest rate | 1.05% | ||||||||||||||||||
Stock based compensation | $ 260,000 | ||||||||||||||||||
Stock option to purchase of shares of common stock as compensation for services provided | 1,333 | ||||||||||||||||||
Stock option term | 10 years | ||||||||||||||||||
Stock option expire date | Dec. 31, 2025 | ||||||||||||||||||
Number of stock options granted during the period | 1,333 | ||||||||||||||||||
Grant exercise price | $ 195.02 | ||||||||||||||||||
Stock option granted value | $ 260,000 | ||||||||||||||||||
Mr. Phipps [Member] | |||||||||||||||||||
Number of common stock shares issued during the period | 33,333 | ||||||||||||||||||
Mr. Phipps [Member] | 2014 Equity Incentive Plan [Member] | |||||||||||||||||||
Stock option exercise price per share | $ 1.50 | ||||||||||||||||||
Purchase price per share | $ 2.85 | ||||||||||||||||||
Fair value assumptions, expected volatility rate | 872.00% | ||||||||||||||||||
Fair value assumptions, expected term | 10 years | ||||||||||||||||||
Fair value assumptions, expected risk free interest rate | 1.05% | ||||||||||||||||||
Stock based compensation | $ 190,000 | ||||||||||||||||||
Stock option to purchase of shares of common stock as compensation for services provided | 66,667 | ||||||||||||||||||
Stock option term | 10 years | ||||||||||||||||||
Number of stock options granted during the period | 66,667 | ||||||||||||||||||
Grant exercise price | $ 2.85 | ||||||||||||||||||
Stock option granted value | $ 190,000 | ||||||||||||||||||
Theresa Carlise [Member] | |||||||||||||||||||
Number of common stock shares issued during the period | 25,000 | ||||||||||||||||||
Hector Delgado [Member] | |||||||||||||||||||
Number of common stock shares issued during the period | 8,333 | ||||||||||||||||||
Employee [Member] | |||||||||||||||||||
Number of common stock shares issued during the period | 133,333 | ||||||||||||||||||
Preferred Series J [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 125,000 | 125,000 | 125,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Number of preferred stock issued during the period | 20,000 | ||||||||||||||||||
Preferred stock stated value per share | $ 10 | ||||||||||||||||||
Proceeds from issuance of preferred stock | $ 200,000 | ||||||||||||||||||
Convertible preferred stock price per share | $ 1.50 | ||||||||||||||||||
Preferred stock, shares issued | 64,698 | 64,698 | 64,698 | ||||||||||||||||
Preferred stock, shares outstanding | 64,698 | 64,698 | 64,698 | ||||||||||||||||
Preferred Series L [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 100,000 | 100,000 | 100,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Number of preferred stock issued during the period | 100,000 | ||||||||||||||||||
Preferred stock stated value per share | $ 10 | ||||||||||||||||||
Convertible preferred stock price per share | $ 4 | ||||||||||||||||||
Preferred stock, shares issued | 30,000 | 30,000 | 0 | ||||||||||||||||
Preferred stock, shares outstanding | 30,000 | 30,000 | 0 | ||||||||||||||||
Number of common stock shares issued during the period | 100,000 | ||||||||||||||||||
Preferred Series L [Member] | Three Investors [Member] | |||||||||||||||||||
Number of preferred stock issued during the period | 30,000 | ||||||||||||||||||
Preferred stock stated value per share | $ 10 | ||||||||||||||||||
Proceeds from issuance of preferred stock | $ 300,000 | ||||||||||||||||||
Warrants purchase of common stock shares | 2 | ||||||||||||||||||
Warrants exercise price per share | $ 4 | ||||||||||||||||||
Warrants exercisable term | 3 years | ||||||||||||||||||
Preferred Series A [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 20,000 | 20,000 | 20,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Preferred stock, shares issued | |||||||||||||||||||
Preferred stock, shares outstanding | |||||||||||||||||||
Preferred Series B [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 30,000 | 30,000 | 30,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Preferred stock, shares issued | 3,333 | 3,333 | 3,333 | ||||||||||||||||
Preferred stock, shares outstanding | 3,333 | 3,333 | 3,333 | ||||||||||||||||
Preferred Series C [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 4,000,000 | 4,000,000 | 4,000,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Preferred stock, shares issued | 1,913,676 | 1,913,676 | 1,913,676 | ||||||||||||||||
Preferred stock, shares outstanding | 1,913,676 | 1,913,676 | 1,913,676 | ||||||||||||||||
Preferred Series D [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Preferred stock, shares issued | 2,892,109 | 2,892,109 | 2,892,109 | ||||||||||||||||
Preferred stock, shares outstanding | 2,892,109 | 2,892,109 | 2,892,109 | ||||||||||||||||
Preferred Series E [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 8,746,000 | 8,746,000 | 8,746,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Preferred stock, shares issued | 5,174,200 | 5,174,200 | 5,174,200 | ||||||||||||||||
Preferred stock, shares outstanding | 5,174,200 | 5,174,200 | 5,174,200 | ||||||||||||||||
Preferred Series F [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 1,100,000 | 1,100,000 | 1,100,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Preferred stock, shares issued | 349,999 | 349,999 | 349,999 | ||||||||||||||||
Preferred stock, shares outstanding | 349,999 | 349,999 | 349,999 | ||||||||||||||||
Preferred Series G [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 10,090,000 | 10,090,000 | 10,090,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Preferred stock, shares issued | 5,202,602 | 5,202,602 | 5,202,602 | ||||||||||||||||
Preferred stock, shares outstanding | 5,202,602 | 5,202,602 | 5,202,602 | ||||||||||||||||
Preferred Series H [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 200,000 | 200,000 | 200,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Preferred stock, shares issued | 13,741 | 13,741 | 13,741 | ||||||||||||||||
Preferred stock, shares outstanding | 13,741 | 13,741 | 13,741 | ||||||||||||||||
Preferred Series I [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 114,944 | 114,944 | 114,944 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Preferred stock, shares issued | 49,110 | 49,110 | 49,110 | ||||||||||||||||
Preferred stock, shares outstanding | 49,110 | 49,110 | 49,110 | ||||||||||||||||
Preferred Series K [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 1,250,000 | 1,250,000 | 1,250,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Preferred stock, shares issued | 1,156,866 | 1,156,866 | 1,156,866 | ||||||||||||||||
Preferred stock, shares outstanding | 1,156,866 | 1,156,866 | 1,156,866 | ||||||||||||||||
Increased Number of Shares [Member] | |||||||||||||||||||
Common stock, shares authorized | 750,000,000 | ||||||||||||||||||
Preferred stock, shares authorized | 50,000,000 | ||||||||||||||||||
Authorized capital | 800,000,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Option Issued for Related Parties (Details) | 9 Months Ended |
Sep. 30, 2018shares | |
David Phipps, President, CEO, and Director [Member] | |
Number of new stock options issued during the period | 100,000 |
Theresa Carlise, CFO [Member] | |
Number of new stock options issued during the period | 50,000 |
Hector Delgado, Director [Member] | |
Number of new stock options issued during the period | 25,000 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Outstanding Stock Options Activities (Details) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Equity [Abstract] | |
Number of Options, Beginning Balance | shares | 285,667 |
Number of Options, Granted | shares | 275,000 |
Number of Options, Exercised | shares | |
Number of Options, Forfeited | shares | |
Number of Options, Cancelled | shares | |
Number of Options, Ending Outstanding | shares | 560,667 |
Number of Options Exercisable | shares | 320,042 |
Number of Options, Weighted average fair value of options granted during the period | shares | 275,000 |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ / shares | $ 1.90 |
Weighted Average Exercise Price, Granted | $ / shares | 1.54 |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Weighted Average Exercise Price, Cancelled | $ / shares | |
Weighted Average Exercise Price, Outstanding Ending Balance | $ / shares | 1.72 |
Weighted Average Exercise Price, Exercisable Balance | $ / shares | 1.72 |
Weighted Average Exercise Price. Weighted average fair value of options granted during the period | $ / shares | $ 1.54 |
Weighted Average Remaining Contractual Life (Years), Beginning Outstanding | 8 years 6 months 7 days |
Weighted Average Remaining Contractual Life (Years), Granted | 2 years 9 months |
Weighted Average Remaining Contractual Life (Years), Ending Outstanding | 5 years 6 months 21 days |
Weighted Average Remaining Contractual Life (Years), Exercisable | 5 years 6 months 21 days |
Weighted Average Remaining Contractual Life (Years), Weighted average fair value of options granted during the period | 2 years 9 months |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Outstanding Stock Warrants Activities (Details) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Stockholders Equity - Schedule Of Outstanding Stock Warrants Activities | |
Number of warrants, Beginning Balance | shares | |
Number of warrants, Granted | shares | 60,000 |
Number of warrants, Exercised | shares | |
Number of warrants, Forfeited | shares | |
Number of warrants, Cancelled | shares | |
Number of warrants, Ending outstanding and exercisable | shares | 60,000 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | |
Weighted Average Exercise Price, Granted | $ / shares | 4 |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Weighted Average Exercise Price, Cancelled | $ / shares | |
Weighted Average Exercise Price, Ending outstanding and exercisable | $ / shares | $ 4 |
Weighted Average Remaining Contractual Life (Years), Beginning Balance | 0 years |
Weighted Average Remaining Contractual Life (Years), Granted | 2 years 7 months 13 days |
Weighted Average Remaining Contractual Life (Years), Ending outstanding and exercisable | 2 years 7 months 13 days |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Note payable related party | $ 0 | |
David Phipps [Member] | ||
Payment due to related party | 11,540 | |
Due to related party | 11,540 | $ 6,998 |
Gross wages paid | 54,803 | |
Two Individuals Related to Mr.Phipps [Member] | ||
Gross wages paid | $ 50,406 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Jun. 14, 2018USD ($) | Jun. 14, 2018GBP (£) | Jul. 07, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018GBP (£) |
Employment Agreements [Member] | David Phipps [Member] | |||||
Employment agreement term description | the Company entered into a two (2) year Employment Agreement ("Agreement") with Mr. Phipps, with an automatic one (1) year extension. | the Company entered into a two (2) year Employment Agreement ("Agreement") with Mr. Phipps, with an automatic one (1) year extension. | |||
Annual salary | $ 170,000 | $ 64,862 | |||
Employment agreement term | 1 year | 1 year | |||
Average conversion rate | 1.35130 | 1.35130 | |||
Employment Agreements [Member] | David Phipps [Member] | GBP [Member] | |||||
Annual salary | £ | £ 48,000 | £ 48,000 | |||
Employment Agreements [Member] | Theresa Carlise [Member] | |||||
Employment agreement term description | The Agreement is for a period of two (2) years, with an automatic one (1) year extension. | The Agreement is for a period of two (2) years, with an automatic one (1) year extension. | |||
Annual salary | $ 150,000 | ||||
Consulting Agreement [Member] | Viewtrade Securities Inc. [Member] | Minimum [Member] | |||||
Securities offering | $ 5,000,000 | ||||
Consulting Agreement [Member] | Viewtrade Securities Inc. [Member] | Maximum [Member] | |||||
Securities offering | $ 7,000,000 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Sales Revenue, Net [Member] | ||
Concentration risk percentage | 10.00% | 10.00% |
Concentrations - Schedule of Co
Concentrations - Schedule of Concentration Risk (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cyngus Telecom [Member] | ||
Purchases | $ 385,944 | $ 357,846 |
Concentration risk percentage | 11.10% | 9.70% |
Globalstar Europe [Member] | ||
Purchases | $ 375,148 | $ 489,026 |
Concentration risk percentage | 10.80% | 13.30% |
Garmin [Member] | ||
Purchases | $ 479,717 | $ 444,345 |
Concentration risk percentage | 13.80% | 12.00% |
Network Innovations [Member] | ||
Purchases | $ 1,452,677 | $ 1,468,253 |
Concentration risk percentage | 41.70% | 39.80% |
Concentrations - Schedule of _2
Concentrations - Schedule of Concentration Risk (Details) (Parenthetical) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Supplier Concentration Risk [Member] | ||
Concentration risk | 10.00% | 10.00% |
Concentrations - Schedule of Re
Concentrations - Schedule of Revenue from Each Geographic Location (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | $ 1,386,927 | $ 1,588,466 | $ 4,654,507 | $ 4,547,491 |
Europe [Member] | ||||
Revenue | $ 956,187 | $ 1,077,011 | $ 3,155,339 | $ 2,879,564 |
Concentration risk percentage | 68.90% | 63.40% | 67.80% | 63.30% |
North America [Member] | ||||
Revenue | $ 295,239 | $ 468,700 | $ 940,375 | $ 1,175,554 |
Concentration risk percentage | 21.30% | 29.50% | 20.20% | 25.90% |
South America [Member] | ||||
Revenue | $ 58,296 | $ 46,075 | $ 307,229 | $ 263,187 |
Concentration risk percentage | 4.20% | 2.90% | 6.60% | 5.80% |
Arab States [Member] | ||||
Revenue | $ 4,095 | $ 2,511 | $ 10,241 | $ 17,701 |
Concentration risk percentage | 0.30% | 0.20% | 0.20% | 0.40% |
Asia And Pacific [Member] | ||||
Revenue | $ 61,643 | $ 59,340 | $ 197,013 | $ 192,465 |
Concentration risk percentage | 4.40% | 3.70% | 4.20% | 4.20% |
Africa [Member] | ||||
Revenue | $ 11,467 | $ 4,829 | $ 44,311 | $ 19,020 |
Concentration risk percentage | 0.80% | 0.30% | 1.00% | 0.40% |