Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 15, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Orbital Tracking Corp. | |
Entity Central Index Key | 0001058307 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
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 | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 1,419,345 | |
Trading Symbol | TRKK | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 109,790 | $ 142,888 |
Accounts receivable, net | 209,184 | 170,526 |
Inventory | 309,526 | 269,024 |
Unbilled revenue | 69,995 | 87,080 |
Prepaid expenses | 1,926 | |
Other current assets | 45,185 | 43,713 |
Total current assets | 743,680 | 715,157 |
Property and equipment, net | 1,460,095 | 1,519,845 |
Intangible assets, net | 193,750 | 200,000 |
Total assets | 2,397,525 | 2,435,002 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 998,730 | 874,466 |
Deferred revenue | 28,862 | 19,701 |
Related party payable | 56,161 | 39,027 |
Provision for income taxes | 10,944 | 10,696 |
Convertible note payable, current portion - net of unamortized discount of $66,905 | 17,595 | |
Derivative liability, current portion | 101,925 | |
Liabilities from discontinued operations | 112,397 | 112,397 |
Total current liabilities | 1,326,614 | 1,056,287 |
Total Liabilities | 1,326,614 | 1,056,287 |
Stockholders' Equity: | ||
Common Shares, $0.0001 par value; 750,000,000 shares authorized, 1,260,804 outstanding as of March 31, 2019 and 936,519 outstanding at December 31, 2018 | 125 | 93 |
Additional paid-in capital | 11,118,499 | 11,118,531 |
Accumulated (deficit) | (10,043,044) | (9,735,421) |
Accumulated other comprehensive (income) loss | (6,353) | (6,172) |
Total stockholders' equity | 1,070,911 | 1,378,715 |
Total liabilities and stockholders' equity | 2,397,525 | 2,435,002 |
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 | 6 |
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 | $ 3 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 08, 2018 | Mar. 05, 2016 |
Unamortized discount | $ 66,905 | $ 66,905 | |||
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 outstanding | 1,260,804 | 936,519 | 936,519 | 140,224,577 | |
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 | 44,698 | 64,698 | |||
Preferred stock, shares outstanding | 44,698 | 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 | ||||
Preferred stock, shares outstanding | 30,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Net sales | $ 1,298,371 | $ 1,667,938 |
Cost of sales | 1,052,442 | 1,288,842 |
Gross profit | 245,929 | 379,096 |
Operating expenses: | ||
Selling, general and administrative | 139,003 | 154,992 |
Salaries, wages and payroll taxes | 173,319 | 180,720 |
Professional fees | 103,195 | 109,192 |
Depreciation and amortization | 67,214 | 75,273 |
Total operating expenses | 482,731 | 520,177 |
(Loss) before other expenses and income taxes | (236,802) | (141,081) |
Change in fair value of derivative instruments, net | 36,925 | |
Interest expense | 19,219 | 76 |
Foreign currency exchange rate variance | 14,677 | 4,301 |
Total other income | 70,821 | 4,377 |
Net loss | (307,623) | (145,458) |
Comprehensive Income: | ||
Net loss | (307,623) | (145,458) |
Foreign currency translation adjustments | (181) | 5,000 |
Comprehensive loss | $ (307,804) | $ (140,458) |
Net loss Per Share - Basic & Diluted | $ (0.26) | $ (0.15) |
Weighted average common shares outstanding - Basic & Diluted | 1,193,096 | 936,519 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (307,623) | $ (145,458) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Change in fair value of derivative liabilities | 36,925 | |
Depreciation expense | 60,964 | 69,023 |
Amortization of intangible asset | 6,250 | 6,250 |
Amortization of convertible notes payable, net | 17,595 | |
Imputed interest | 76 | |
Change in operating assets and liabilities: | ||
Accounts receivable | (38,658) | 82,899 |
Inventory | (40,502) | (62,406) |
Unbilled revenue | 17,085 | 9,730 |
Prepaid expense | 1,926 | 32,010 |
Other current assets | (1,472) | (949) |
Accounts payable and accrued liabilities | 124,264 | 142,147 |
Provision for income taxes | 248 | |
Deferred revenue | 9,161 | (161,778) |
Net cash (used in) provided by operating activities | (113,837) | (28,456) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (5,558) | |
Net cash used in investing activities | (5,558) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds of note payable, related party, net | 17,134 | 14,335 |
Proceeds of convertible notes payable | 65,000 | |
Net cash provided by financing activities | 82,134 | 14,335 |
Effect of exchange rate on cash | (1,395) | 2,885 |
Net decrease in cash | (33,098) | (16,794) |
Cash beginning of period | 142,888 | 233,326 |
Cash end of period | 109,790 | 216,532 |
Cash paid during the period for | ||
Interest | ||
Income tax |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018 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 Orbital Tracking Corp. (the “Company”) for the year ended December 31, 2018, which are contained in the Company’s annual report on Form 10-K as filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2019. The consolidated balance sheet as of December 31, 2018 was derived from those financial statements. Basis of Presentation and Principles of Consolidation The 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 SEC for interim financial information. The 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 March 31, 2019, and the results of operations and cash flows for the three months ended March 31, 2019 have been included. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year. Description of Business 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. GTCL was formed under the laws of England and Wales in 2008. On February 19, 2015, the Company entered into a share exchange agreement with 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 10 - 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 March 30, 2018, we had 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 10 - 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, derivative liabilities, preferred deemed dividend 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. Quarterly, an adjustment is made offsetting sales for any balance over 90 days, not yet collected in 120 days from the 90-day report date. Account balances deemed to be uncollectible offset sales after all means of collection have been exhausted and the potential for recovery is considered remote. As of March 31, 2019, and December 31, 2018, there is an allowance for doubtful accounts of $0 and $448. Inventories Inventories are valued at the lower of cost or net realizable value, using the first-in first-out cost method. The Company assesses the valuation of its inventories and reduces the carrying value of those inventories that are obsolete or in excess of the Company’s forecasted usage to their estimated net realizable value. The Company estimates the net realizable value of such inventories based on analysis and assumptions including, but not limited to, historical usage, expected future demand and market requirements. A change to the carrying value of inventories is recorded to cost of goods sold. In July 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory Foreign Currency Translation The Company’s reporting currency is U.S. Dollars. The accounts of one of the Company’s subsidiaries, GTCL, is maintained using the appropriate local currency, Great British Pound (“GBP”), as the functional currency. All assets and liabilities are translated into U.S. Dollars at balance sheet date, shareholders’ equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are deferred as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) gain. Transaction gains and losses arising from exchange rate fluctuation on transactions denominated in a currency other than the functional currency are included in the statements of operations. The relevant translation rates are as follows: for the three months ended March 31, 2019 closing rate at 1.304251 US$: GBP, average rate at 1.3064 US$: GBP, for the three months ended March 31, 2018 closing rate at 1.4015 US$: GBP, average rate at 1.39059 US$: GBP, for the year ended 2018 closing rate at 1.274700 US$: GBP, average rate at 1.296229 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. Equipment sales which have been prepaid, before the goods are shipped are recorded as deferred revenue and once shipped is recognized as revenue. The Company also records as deferred revenue, certain annual plans for airtime, which are paid in advance. Once airtime services are incurred, they are recognized as revenue. Unbilled revenue is recognized for airtime plans whereby the customer is invoiced for its data usage the following month after services are incurred. 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 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. In accordance with ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedient Deferred revenue is shown separately in the condensed consolidated balance sheets as current liabilities. At March 31, 2019, we had deferred revenue of approximately $28,862. At December 31, 2018, we had deferred revenue of approximately $19,701. 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: ● Significant underperformance relative to expected historical or projected future operating results; ● Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and ● 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 three months ended March 31, 2019 and the year ended December 31, 2018, 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 March 31, 2019 and December 31, 2018, respectively. Fair value of financial instruments The Company adopted 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 following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable input (Level 3) from January 1, 2019 to March 31, 2019: Conversion feature derivative liability Balance at January 1, 2019 - Convertible notes payable – January 18, 2019 65,000 Change in fair value included in earnings 36,925 Balance at March 31, 2019 $ 101,925 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. Accounting for Derivative Instruments Derivatives are required to be recorded on the balance sheet at fair value. These derivatives, including embedded derivatives in the Company’s structured borrowings, are separately valued and accounted for on the Company’s balance sheet. Fair values for exchange traded securities and derivatives are based on quoted market prices. Where market prices are not readily available, fair values are determined using market-based pricing models incorporating readily observable market data and requiring judgment and estimates 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 accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”) which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach require the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. 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 is 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: March 31, 2019 March 31, 2018 Convertible preferred stock 2,214,729 2,006,399 Stock options 585,667 285,667 Stock warrants 60,000 - Total 2,860,396 2,292,066 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. Recent Accounting Pronouncements In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedient In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718 : Scope of Modification Accounting In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity and Derivatives and Hedging On December 22, 2017 the SEC 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. In November 2018, the FASB amended Topic 842, Leases, by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 with ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Going Concern Considerations
Going Concern Considerations | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern Considerations | NOTE 2 - GOING CONCERN CONSIDERATIONS The accompanying condensed consolidated financial statements are prepared assuming the Company will continue as a going concern. At March 31, 2019, the Company had an accumulated deficit of approximately $10,043,044, negative working capital of approximately $582,934 and net loss of approximately $307,623 during the three months ended March 31, 2019. 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 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 | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 3 - INVENTORIES At March 31, 2019 and December 31, 2018, inventories consisted of the following: March 31, 2019 December 31, 2018 Finished goods $ 309,526 $ 269,024 Less reserve for obsolete inventory - - Total $ 309,526 $ 269,024 For the three months ended March 31, 2019 and the year ended December 31, 2018, the Company did not make any change for reserve for obsolete inventory. |
Prepaid Expenses
Prepaid Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses | NOTE 4 – PREPAID EXPENSES Prepaid expenses amounted to $0 at March 31, 2019 and $1,926 at December 31, 2018, 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 cost associated with certain deferred revenue. The current portion consists of costs paid for future services which will occur within a year. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 5 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following: March 31, 2019 December 31, 2018 Office furniture and fixtures $ 78,690 $ 76,907 Computer equipment 31,317 30,678 Rental equipment 67,622 66,090 Appliques 2,160,096 2,160,096 Website development 23,341 23,061 Less accumulated depreciation (900,971 ) (836,987 ) Total $ 1,460,095 $ 1,519,845 Depreciation expense was $60,965 and $69,023 for the three months ended March 31, 2019 and 2018, respectively. For the year ended December 31, 2018 depreciation expense was $263,864. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
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 three months ended March 31, 2019 and 2018, the Company amortized $6,250, respectively. Future amortization of intangible assets is as follows: 2019 18,750 2020 25,000 2021 25,000 2022 25,000 2023 and thereafter 50,000 Total $ 143,750 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 | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, 2019 December 31, 2018 Accounts payable $ 739,599 $ 625,157 Rental deposits 21,698 22,991 Customer deposits payable 41,833 37,099 Accrued wages & payroll liabilities 13,409 14,807 Property tax payable 27,246 31,955 VAT liability & sales tax payable 63,654 47,875 Pre-merger accrued other liabilities 65,948 65,948 Accrued other liabilities 25,343 28,634 Total $ 998,730 $ 874,466 |
Convertible Notes Payable
Convertible Notes Payable | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | NOTE 8 – CONVERTIBLE NOTES PAYABLE On January 14, 2019, under the terms of a Securities Purchase Agreement, we issued a Convertible Promissory Note in the amount of $65,000 (the “Note”) to Power Up Lending Group Ltd. (“Power Up”). The Note bears interest at a rate of twelve percent (12%) per year and is due one (1) year from the date of issue. Beginning 180 days from the issue date, the Note is convertible to our common stock at a price equal to 61% of the Market Price, which is defined as the lowest trading price for our common stock during the 15 trading days prior to the conversion notice. Conversions under the Note are limited such that the holder may not convert the Note to the extent that the number of shares of common stock issuable upon the conversion would result in beneficial ownership by the holder and its affiliates of more than 4.99% of our outstanding shares of common stock. In the event of any default, the Note will bear interest at a rate of 22% per year. The Note may be pre-paid at a premium for the first 150 days after issue, with the pre-payment amount ranging from 115% of the balance to 140% of the balance. After 150 days from issue, pre-payment of the Note is not allowed. For the three months ended March 31, 2019, the Company recorded $84,500 in principal amount of original issue discount convertible notes for an aggregate purchase price of $65,000, as there is an intent to prepay the obligation. Total amortization of debt discounts for the convertible debentures amounted to $17,595 and $0 for the three months ended March 31, 2019 and 2018, respectively, and is recorded on its statement of operations as interest expense. At March 31, 2019 and 2018, outstanding balance of convertible debentures was $84,500 and $0, respectively. |
Derivative Liabilities
Derivative Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | NOTE 9 – DERIVATIVE LIABILITIES The convertible notes are accounted for as liabilities at the date of issuance and adjusted to fair value through earnings for the three months ended March 31, 2019. The Company recorded amortization for the discount to the convertible notes of $17,595 at March 31, 2019. As of March 31, 2019, the Company has unamortized discount balance of $66,905. The Company has recognized derivative liabilities of $101,925 at March 31, 2019. The loss resulting from the increase in fair value of this convertible instrument was $36,925 for the three months ended March 31, 2019. Conversion feature derivative liability Balance at January 1, 2019 - Derivative liability 65,000 Change in fair value included in earnings 36,925 Balance at March 31, 2019 $ 101,925 The Company used the following assumptions for determining the fair value of the convertible instruments granted under the Black-Scholes option pricing model: March 31, 2019 Expected volatility 328 % Expected term - years 0.79 Risk-free interest rate 2.57 % Expected dividend yield - % |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 10 - 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 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, 2018. 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 March 31, 2019, 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. As of March 31, 2019, there were 20,000 shares of Series A Convertible Preferred Stock authorized and no shares issued and outstanding. As of March 31, 2019, there were 30,000 shares of Series B Convertible Preferred Stock authorized and 3,333 shares issued and outstanding. As of March 31, 2019, there were 4,000,000 shares of Series C Convertible Preferred Stock authorized and 1,913,676 shares issued and outstanding. As of March 31, 2019, there were 5,000,000 shares of Series D Convertible Preferred Stock authorized and 2,892,109 shares issued and outstanding. As of March 31, 2019, there were 8,746,000 shares of Series E Convertible Preferred Stock authorized and 5,174,200 shares issued and outstanding. As of March 31, 2019, there were 1,100,000 shares of Series F shares authorized and 349,999 shares issued and outstanding. As of March 31, 2019, there were 10,090,000 shares of Series G shares authorized and 5,202,602 shares issued and outstanding. As of March 31, 2019, there were 200,000 shares of Series H shares authorized and 13,741 shares issued and outstanding. As of March 31, 2019, there were 114,944 shares of Series I shares authorized and 49,110 shares issued and outstanding. As of March 31, 2019, there were 125,000 shares of Series J shares authorized and 64,698 shares issued and outstanding. As of March 31, 2019, there were 1,250,000 shares of Series K shares authorized and 1,156,866 shares issued and outstanding. As of March 31, 2019, there were 100,000 shares of Series L shares authorized and 30,000 shares issued and outstanding Common Stock As of March 31, 2019, there were 750,000,000 shares of Common Stock authorized and 1,260,804 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 December 31, 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 year ended December 31, 2018, the amount of vested options was 68,750. On July 1, 2018, 34,375 options were fully vested and valued on the vesting date at approximately $1.38 per option or a total of $47,422 using a Black-Scholes option pricing model with the following assumptions: strike price of 1.50 stock price of $1.38 per share (based on the market price at close on July 1, 2018) volatility of 718%, expected term of 3 years, and a risk-free interest rate of 2.69%. On October 1, 2018, an additional 34,375 options were fully vested and valued on the vesting date at approximately $1.38 per option or a total of $47,422 using a Black-Scholes option pricing model with the following assumptions: stock price of $1.38 per share (based on the market price close at grant date on June 14, 2018) volatility of 607%, expected term of 3 years, and a risk-free interest rate of 2.64%. In reference to this grant, the company recorded stock-based compensation of $81,698 for the year ended December 31, 2018. On December 18, 2018, the Company cancelled the unvested portion of options previously granted on June 14, 2018, under the 2018 Incentive Plan totaling 206,250. The grants cancelled will be returned to the Plan. The number of options cancelled to our officers and directors were as follows: David Phipps, President, CEO, and Director (75,000 ) Theresa Carlise, CFO (37,500 ) Hector Delgado, Director (18,750 ) In addition, we cancelled options to purchase a total of (75,000) shares to two key employees. On December 18, 2018, we issued 831,250 new stock options to our executives and directors under the 2018 Incentive Plan. All options issued have an exercise price of $0.15 per share, with the exception of David Phipps, a Ten Percent Stockholder, whose exercise price is $0.17, are fully vested and expire on December 17, 2023. The options were valued on the grant date at approximately $0.15 per option or a total of $124,674 using a Black-Scholes option pricing model with the following assumptions: strike price of 0.15 stock price of $0.15 per share (based on the market price at close on December 17, 2018) volatility of 773%, expected term of 5 years, and a risk-free interest rate of 2.69%. On January 18, 2019, David Phipps exercised 325,000 options via a cashless exercise. Additionally, on January 18, 2019, two employees exercised 275,000 options through a cashless exercise. The Company withheld newly acquired shares pursuant to the exercise of the Option. The amount of common stock issued is calculated by using [Number of Options Exercising] minus * divided by Options Exercised Exercise Price Market Price Shares withheld as Payment Common Stock Issued David Phipps 325,000 $ 0.17 $ 0.35 157,857 167,143 Other 275,000 $ 0.15 $ 0.35 117,858 157,142 600,000 275,715 324,285 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, 2015 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, 2015 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, 2015 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, for the years ended December 31, 2017, the Company recorded stock-based compensation of $600,000. For the three months ended March 31, 2019 and 2018, the Company recorded no stock-based compensation, respectively. For the year ended December 31, 2018 the Company recorded $219,518 stock-based compensation. Stock options outstanding at March 31, 2019, as disclosed in the below table, have approximately $175,700 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 three months ended March 31, 2019 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at January 1, 2019 1,185,667 $ 0.66 5.56 Granted Exercised (600,000 ) 0.16 4.72 Forfeited Cancelled - $ - - Balance outstanding at March 31, 2019 585,667 1.166 5.92 Options exercisable at March 31, 2019 585,667 A summary of the status of the Company’s outstanding warrants and changes during the three months ended March 31, 2019 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at January 1, 2019 60,000 $ 4 2.37 Granted - - - Exercised - - - Forfeited - - - Cancelled - - - Balance outstanding and exercisable at March 31, 2019 60,000 $ 4 2.12 As of March 31, 2019 and December 31, 2018, there were 60,000 warrants outstanding, respectively. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 11 - RELATED PARTY TRANSACTIONS The Company entered into a note for $122,536 from the Company’s Chief Executive Officer as part of the Share Exchange Agreement on February 15, 2015. On May 11, 2018, the balance of $5,768, was paid in full. As of March 31, 2019, the accounts payable due to related party includes accrued wages of $18,367 advances for inventory and services due to David Phipps of $27,240. Total payments due to David Phipps as of March 31, 2019 and December 31, 2018 are $45,607 and $39,027, respectively. In addition, as of March 31, 2019, the Company owes Hector Delgado, its Director, $10,000 for accrued director fees and expenses for Theresa Carlise, its Chief Financial Officer, $554. The balance of the related party payable was $56,161 and $39,027 as of March 31, 2019 and December 31, 2018, respectively. Those related party payable are non-interest bearing and due on demand. The Company employs two individuals who are related to Mr. Phipps, of which earned gross wages totaling $18,117 and $19,121 for the three months ended March 31, 2019 and March 31, 2018, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12 - COMMITMENTS AND CONTINGENCIES Employment Agreements On June 14, 2018, the Company entered into a two (2) year Employment Agreement (the “Phipps Agreement”) with Mr. Phipps, with an automatic one (1) year extension. Under the Phipps 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, GTCL. For the year ended December 31, 2018, the £48,000 equivalent to USD is $62,219 and the yearly conversion rate is 1.296229. The Phipps Agreement provides for a performance bonus based on exceeding our annual revenue goals and on our ability to attract new investment. The Phipps 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 Phipps 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 Phipps Agreement terminates and supersedes the Original Phipps Agreement (as defined below) and any subsequent amendments, effective as of the June 14, 2018. Previously the Company had a two-year Executive Employment Agreement with Mr. Phipps, effective January 1, 2016 (the “Original Phipps Agreement”). Under the Original Phipps Agreement, Mr. Phipps agreed to serve as the Company’s Chief Executive Officer and President and received an annual base salary equal to the sum of $144,000 and £48,000, or $61,833 at the yearly conversion rate of 1.288190. Mr. Phipps was also eligible for bonus compensation in an amount equal to up to fifty (50%) percent of his then-current base salary if the Company meets or exceeds criteria adopted by the Compensation Committee, if any, or Board and equity awards as may be approved in the discretion of the Compensation Committee or Board. On January 1, 2018, the Original Phipps Agreement automatically renewed for another year. Also, on June 14, 2018, we entered into a new Employment Agreement (“Carlise Agreement”) with our Chief Financial Officer, Theresa Carlise. The Carlise 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 Carlise Agreement provides for performance bonuses based on exceeding our annual revenue goals and on our ability to attract new investment. The Carlise 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 Carlise Agreement), 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 Carlise Agreement terminates and supersedes the Original Carlise Agreement (as defined below) and any subsequent amendments, effective as of the June 14, 2018. Prior to June 14, 2018, the Company had a one-year agreement with Ms. Carlise, as its Chief Financial Officer, Treasurer and Secretary (the “Original Carlise Agreement”). The Original Carlise Agreement provided for an annual compensation of $140,000 as well as medical benefits. The Original Carlise Agreement was effective December 1, 2016 and had an automatic renewal clause pursuant to which the Original Carlise Agreement renews itself for another year, if not cancelled by the Company previously. The Original Carlise Agreement had been automatically extended for an additional term of one year on December 1, 2017. In addition to the base salary of $140,000 annually, Ms. Carlise was eligible to receive an annual cash bonus if the Company meets or exceeds criteria adopted by the Compensation Committee of the Board of Directors and shall be eligible for grants of awards under stock option or other equity incentive plans of the Company. 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 | 3 Months Ended |
Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentrations | NOTE 13 - CONCENTRATIONS Customers: Amazon accounted for 36.2% and 29.2% of the Company’s revenues during the three months ended March 31, 2019 and 2018, respectively. No other customer accounted for 10% or more of the Company’s revenues for either period. Suppliers: The following table sets forth information as to each supplier that accounted for 10% or more of the Company’s purchases for the three months ended March 31, 2019 and 2018. March 31, 2019 March 31, 2018 Globalstar Europe $ 140,736 13.5 % $ 184,603 22.7 % Garmin $ 134,778 13.0 % $ 166,877 20.5 % Network Innovations $ 309,450 29.8 % $ 463,760 57.1 % Cygnus Telecom $ 127,917 12.3 % $ 120,796 14.9 % Satcom Global $ 5,580 0.5 % $ 66,913 8.2 % Geographic The following table sets forth revenue as to each geographic location, for the three months ended March 31, 2019 and 2018: March 31, 2019 March 31, 2018 Europe $ 998,854 77.0 % $ 1,015,391 60.9 % North America 189,466 14.6 % 483,579 29.0 % South America 19,791 1.5 % 72,803 4.4 % Asia & Pacific 77,949 6.0 % 71,425 4.3 % Africa 11,312 0.9 % 24,739 1.5 % $ 1,298,371 $ 1,667,938 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 - SUBSEQUENT EVENTS On April 9, 2019, the Company issued 4,052 shares of its common stock upon the conversion of 60,782 shares of its Preferred Series C, 87,333 shares of common stock upon the conversion of 655,000 shares of Preferred Series D and 25,568 shares of common stock upon the conversion of 38,352 shares of Preferred Series K. On April 22, 2019, the Company issued 1,707 shares of its common stock upon the conversion of 256 shares of its Preferred Series J and 39,963 shares of common stock upon the conversion of 59,945 shares of Preferred Series K. On April 30, 2019, the Company entered into a Shares for Note Exchange Agreement (each, an “Agreement” and collectively, the “Agreements”) with certain holders of the Company’s preferred stock, each of whom is an accredited investor (each, a “Converting Stockholder” and collectively, the “Converting Stockholders”). Pursuant to the terms of the Agreements, the Company agreed to exchange the preferred shares held by the respective Converting Stockholders for promissory notes as follows: Series of Preferred Stock No. of Converting Holders of Preferred Stock Aggregate No. of Shares Held by Converting Stockholders Aggregate Principal Amount of Notes into which Shares Converted No. of Outstanding Shares Following Conversion B 1 3,333 $ 11 — C 1 1,852,894 $ 12,353 — D 3 2,213,660 $ 29,516 23,449 E — — $ — 5,174,200 F 1 349,999 $ 233 — G 2 5,202,602 $ 3,468 — H 3 13,741 $ 916 — I 3 48,610 $ 3,241 500 J 5 64,442 $ 42,961 — K 7 1,058,569 $ 70,571 — L 3 20,000 $ 5,000 10,000 TOTAL: 10,827,850 $ 168,270 5,208,149 As a result, the Company has eliminated 99.4% of its outstanding shares of preferred stock, excluding those shares held by management. In exchange for the above-referenced shares of preferred stock, the Company issued a promissory note (each, a “Note” and collectively, the “Notes”) to each of the Converting Stockholders on April 30, 2019. Each Note bears interest at a rate of 6% per annum and is due on the second anniversary of the issuance date. Interest accrues on a simple interest, non-compounded basis and will be added to the principal amount on the maturity date. In the event that any amount due under a Note is not paid as and when due, such amounts will accrue interest at the rate of 12% per year, simple interest, non-compounding, until paid. The Company may prepay the Notes at any time. On May 14, 2019, the Company repaid $43,284 of the above referenced notes, leaving a balance of $124,986, as of May 14,2019. On May 13, 2019 (the “Issue Date”), the Company entered into a Note Purchase Agreement (the “NPA”) by and among the Company and the lenders set forth on the lender schedule to the NPA (the “Lenders”), as amended by that certain Amendment to Note Purchase Agreement (the “Amendment,” and, together with the NPA, the “Agreement”) by and among the Company and the Lenders. Pursuant to the NPA, the Company issued an aggregate principal amount of $650,000 of its convertible promissory notes. Pursuant to the Amendment, the Company reserved the right to issue and issued an additional 20% of the $650,000 principal amount of its convertible promissory notes or $130,000 of its convertible promissory notes. In total, pursuant to the Agreement, the Company issued an aggregate principal amount of $805,000 of its convertible promissory notes (the “Notes”). The Notes bear interest at a rate of 6% per annum, simple interest, and mature on the third anniversary of the Issue Date (the “Maturity Date”), to the extent that the Notes and the principal amounts and any interest accrued thereunder (the “Indebtedness”) have not been converted into shares of common stock of the Company. Interest on the Notes will accrue on a simple interest, non-compounded basis and will be added to the principal amounts on the Maturity Date or such earlier date as may be due upon an Event of Default (as defined below), at which time all Indebtedness will be due and payable, unless earlier converted into Conversion Shares (as defined below). In the event that any amount due under the Notes is not paid as and when due, such amounts will accrue interest at the rate of 12% per year, simple interest, non-compounding, until paid. The Company may not pre-pay or redeem the Notes other than as required by the Agreement. The Notes are general, unsecured obligations of the Company. The proceeds of the Notes will be used to repay certain outstanding indebtedness of the Company and for general corporate purposes. The holders of the Notes (the “Holders”) have an optional right of conversion. A Holder may elect to convert its Note, and all of the Indebtedness outstanding as of such time, into the number of fully paid and non-assessable shares of Common Stock (the “Conversion Shares”) as determined by dividing the Indebtedness by $0.10, subject to certain adjustments, but excluding adjustment for a reserve stock split of no more than 1:20 contemplated by the Company at the Issue Date. The optional right of conversion is subject to a beneficial ownership limitation of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion. The Agreement contains customary representations and warranties and customary affirmative and negative covenants. These covenants include, among other things, certain limitations on the ability of the Company to: (i) pay dividends on its capital stock; (ii) make distributions in respect of its capital stock; (iii) acquire shares of capital stock; and, (iv) sell, lease or dispose of assets. Pursuant to the Agreement, the Holders are granted demand registration rights and pre-emptive rights as set forth in the Agreement. The Agreement includes customary events of default, including, among others: (i) non-payment of amounts due thereunder, (ii) non-compliance with covenants thereunder, (iii) bankruptcy or insolvency (each, an “Event of Default”). Upon the occurrence of an Event of Default, a majority of the Holders may accelerate the maturity of the Indebtedness. On May 13, 2019, the Company entered into two consulting agreements (each, a “Consulting Agreement” and together, the “Consulting Agreements”) with unrelated third parties to provide capital raising advisory services and business growth and development services, each for a term of six months. In exchange for such services, each consultant will receive (i) a Note in the amount of $44,000 issued pursuant to the Agreement, (ii) a Note in the amount of $12,500 with a maturity of three years bearing interest at a rate of 6% per annum with an optional right of conversion, (iii) payment of a retainer ranging from $10,000 to $30,000, and (iv) monthly payments ranging from $5,000 to $10,000 for six months. On May 14, 2019, the Company repaid the convertible note payable, (see Note 8) as issued on January 14, 2019, an aggregate of $87,778.14, representing principal of $65,000, prepayment penalty of $19,500 and accrued interest of $3,278.14. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The 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 SEC for interim financial information. The 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 March 31, 2019, and the results of operations and cash flows for the three months ended March 31, 2019 have been included. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year. |
Description of Business | Description of Business 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. GTCL was formed under the laws of England and Wales in 2008. On February 19, 2015, the Company entered into a share exchange agreement with 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 10 - 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 March 30, 2018, we had 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 10 - 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, derivative liabilities, preferred deemed dividend 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. Quarterly, an adjustment is made offsetting sales for any balance over 90 days, not yet collected in 120 days from the 90-day report date. Account balances deemed to be uncollectible offset sales after all means of collection have been exhausted and the potential for recovery is considered remote. As of March 31, 2019, and December 31, 2018, there is an allowance for doubtful accounts of $0 and $448. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value, using the first-in first-out cost method. The Company assesses the valuation of its inventories and reduces the carrying value of those inventories that are obsolete or in excess of the Company’s forecasted usage to their estimated net realizable value. The Company estimates the net realizable value of such inventories based on analysis and assumptions including, but not limited to, historical usage, expected future demand and market requirements. A change to the carrying value of inventories is recorded to cost of goods sold. In July 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory |
Foreign Currency Translation | Foreign Currency Translation The Company’s reporting currency is U.S. Dollars. The accounts of one of the Company’s subsidiaries, GTCL, is maintained using the appropriate local currency, Great British Pound (“GBP”), as the functional currency. All assets and liabilities are translated into U.S. Dollars at balance sheet date, shareholders’ equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are deferred as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) gain. Transaction gains and losses arising from exchange rate fluctuation on transactions denominated in a currency other than the functional currency are included in the statements of operations. The relevant translation rates are as follows: for the three months ended March 31, 2019 closing rate at 1.304251 US$: GBP, average rate at 1.3064 US$: GBP, for the three months ended March 31, 2018 closing rate at 1.4015 US$: GBP, average rate at 1.39059 US$: GBP, for the year ended 2018 closing rate at 1.274700 US$: GBP, average rate at 1.296229 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. Equipment sales which have been prepaid, before the goods are shipped are recorded as deferred revenue and once shipped is recognized as revenue. The Company also records as deferred revenue, certain annual plans for airtime, which are paid in advance. Once airtime services are incurred, they are recognized as revenue. Unbilled revenue is recognized for airtime plans whereby the customer is invoiced for its data usage the following month after services are incurred. 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 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. In accordance with ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedient Deferred revenue is shown separately in the condensed consolidated balance sheets as current liabilities. At March 31, 2019, we had deferred revenue of approximately $28,862. At December 31, 2018, we had deferred revenue of approximately $19,701. |
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: ● Significant underperformance relative to expected historical or projected future operating results; ● Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and ● 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 three months ended March 31, 2019 and the year ended December 31, 2018, 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 March 31, 2019 and December 31, 2018, respectively. |
Fair Value of Financial Instruments | Fair value of financial instruments The Company adopted 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 following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable input (Level 3) from January 1, 2019 to March 31, 2019: Conversion feature derivative liability Balance at January 1, 2019 - Convertible notes payable – January 18, 2019 65,000 Change in fair value included in earnings 36,925 Balance at March 31, 2019 $ 101,925 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. |
Accounting for Derivative Instruments | Accounting for Derivative Instruments Derivatives are required to be recorded on the balance sheet at fair value. These derivatives, including embedded derivatives in the Company’s structured borrowings, are separately valued and accounted for on the Company’s balance sheet. Fair values for exchange traded securities and derivatives are based on quoted market prices. Where market prices are not readily available, fair values are determined using market-based pricing models incorporating readily observable market data and requiring judgment and estimates |
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 accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”) which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach require the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. 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 is 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: March 31, 2019 March 31, 2018 Convertible preferred stock 2,214,729 2,006,399 Stock options 585,667 285,667 Stock warrants 60,000 - Total 2,860,396 2,292,066 |
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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedient In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718 : Scope of Modification Accounting In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity and Derivatives and Hedging On December 22, 2017 the SEC 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. In November 2018, the FASB amended Topic 842, Leases, by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 with ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 Reconciliation of Derivative Liability Measured at Fair Value | The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable input (Level 3) from January 1, 2019 to March 31, 2019: Conversion feature derivative liability Balance at January 1, 2019 - Convertible notes payable – January 18, 2019 65,000 Change in fair value included in earnings 36,925 Balance at March 31, 2019 $ 101,925 |
Schedule of Dilutive Common Stock Equivalents | The following are dilutive common stock equivalents during the period ended: March 31, 2019 March 31, 2018 Convertible preferred stock 2,214,729 2,006,399 Stock options 585,667 285,667 Stock warrants 60,000 - Total 2,860,396 2,292,066 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | At March 31, 2019 and December 31, 2018, inventories consisted of the following: March 31, 2019 December 31, 2018 Finished goods $ 309,526 $ 269,024 Less reserve for obsolete inventory - - Total $ 309,526 $ 269,024 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: March 31, 2019 December 31, 2018 Office furniture and fixtures $ 78,690 $ 76,907 Computer equipment 31,317 30,678 Rental equipment 67,622 66,090 Appliques 2,160,096 2,160,096 Website development 23,341 23,061 Less accumulated depreciation (900,971 ) (836,987 ) Total $ 1,460,095 $ 1,519,845 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Future Amortization of Intangible Assets | Future amortization of intangible assets is as follows: 2019 18,750 2020 25,000 2021 25,000 2022 25,000 2023 and thereafter 50,000 Total $ 143,750 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Other Liabilities | Accounts payable and accrued other liabilities consisted of the following: March 31, 2019 December 31, 2018 Accounts payable $ 739,599 $ 625,157 Rental deposits 21,698 22,991 Customer deposits payable 41,833 37,099 Accrued wages & payroll liabilities 13,409 14,807 Property tax payable 27,246 31,955 VAT liability & sales tax payable 63,654 47,875 Pre-merger accrued other liabilities 65,948 65,948 Accrued other liabilities 25,343 28,634 Total $ 998,730 $ 874,466 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Conversion Feature Derivative Liability | Conversion feature derivative liability Balance at January 1, 2019 - Derivative liability 65,000 Change in fair value included in earnings 36,925 Balance at March 31, 2019 $ 101,925 |
Schedule of Assumptions for Fair Value of Convertible Instruments Granted Under Black-scholes Option Pricing Model | The Company used the following assumptions for determining the fair value of the convertible instruments granted under the Black-Scholes option pricing model: March 31, 2019 Expected volatility 328 % Expected term - years 0.79 Risk-free interest rate 2.57 % Expected dividend yield - % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Stock Option Cancelled | The number of options cancelled to our officers and directors were as follows: David Phipps, President, CEO, and Director (75,000 ) Theresa Carlise, CFO (37,500 ) Hector Delgado, Director (18,750 ) |
Schedule of Exercise of Shares | Options Exercised Exercise Price Market Price Shares withheld as Payment Common Stock Issued David Phipps 325,000 $ 0.17 $ 0.35 157,857 167,143 Other 275,000 $ 0.15 $ 0.35 117,858 157,142 600,000 275,715 324,285 |
Schedule of Outstanding Stock Options Activities | A summary of the status of the Company’s outstanding stock options and changes during the three months ended March 31, 2019 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at January 1, 2019 1,185,667 $ 0.66 5.56 Granted Exercised (600,000 ) 0.16 4.72 Forfeited Cancelled - $ - - Balance outstanding at March 31, 2019 585,667 1.166 5.92 Options exercisable at March 31, 2019 585,667 |
Schedule of Outstanding Stock Warrants Activities | A summary of the status of the Company’s outstanding warrants and changes during the three months ended March 31, 2019 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at January 1, 2019 60,000 $ 4 2.37 Granted - - - Exercised - - - Forfeited - - - Cancelled - - - Balance outstanding and exercisable at March 31, 2019 60,000 $ 4 2.12 |
Concentrations (Tables)
Concentrations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 three months ended March 31, 2019 and 2018. March 31, 2019 March 31, 2018 Globalstar Europe $ 140,736 13.5 % $ 184,603 22.7 % Garmin $ 134,778 13.0 % $ 166,877 20.5 % Network Innovations $ 309,450 29.8 % $ 463,760 57.1 % Cygnus Telecom $ 127,917 12.3 % $ 120,796 14.9 % Satcom Global $ 5,580 0.5 % $ 66,913 8.2 % |
Schedule of Revenue from Each Geographic Location | The following table sets forth revenue as to each geographic location, for the three months ended March 31, 2019 and 2018: March 31, 2019 March 31, 2018 Europe $ 998,854 77.0 % $ 1,015,391 60.9 % North America 189,466 14.6 % 483,579 29.0 % South America 19,791 1.5 % 72,803 4.4 % Asia & Pacific 77,949 6.0 % 71,425 4.3 % Africa 11,312 0.9 % 24,739 1.5 % $ 1,298,371 $ 1,667,938 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Schedule of Exchange for Conversion of Preferred Shares for Promissory Notes | Pursuant to the terms of the Agreements, the Company agreed to exchange the preferred shares held by the respective Converting Stockholders for promissory notes as follows: Series of Preferred Stock No. of Converting Holders of Preferred Stock Aggregate No. of Shares Held by Converting Stockholders Aggregate Principal Amount of Notes into which Shares Converted No. of Outstanding Shares Following Conversion B 1 3,333 $ 11 — C 1 1,852,894 $ 12,353 — D 3 2,213,660 $ 29,516 23,449 E — — $ — 5,174,200 F 1 349,999 $ 233 — G 2 5,202,602 $ 3,468 — H 3 13,741 $ 916 — I 3 48,610 $ 3,241 500 J 5 64,442 $ 42,961 — K 7 1,058,569 $ 70,571 — L 3 20,000 $ 5,000 10,000 TOTAL: 10,827,850 $ 168,270 5,208,149 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) | Mar. 08, 2018shares | Mar. 28, 2014 | Mar. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2018shares |
Reverse stock split | reversed split for a ratio of 1 for 150 | effecting a 1:150 reverse split | |||
Common stock par value | $ / shares | $ 0.0001 | $ 0.0001 | |||
Voting rights percentage | 39.00% | ||||
Common stock shares outstanding | shares | 140,224,577 | 1,260,804 | 936,519 | 936,519 | |
Cash insured by FDIC | $ 250,000 | ||||
Allowance for doubtful accounts receivable | 0 | $ 448 | |||
Deferred revenue | $ 28,862 | 19,701 | |||
Intangible asset, amortization period | 10 years | ||||
Asset impairment charges | |||||
US$: GBP [Member] | Closing Rate [Member] | |||||
Foreign currency translation rate | 1.304251 | 1.274700 | 1.39059 | ||
US$: GBP [Member] | Yearly Average Rate [Member] | |||||
Foreign currency translation rate | 1.3064 | 1.296229 | 1.4015 |
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) | 3 Months Ended |
Mar. 31, 2019 | |
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 Reconciliation of Derivative Liability Measured at Fair Value (Details) - Conversion Feature Derivative Liability [Member] | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Balance at Beginning of Period | |
Convertible notes payable | 65,000 |
Change in fair value included in earnings | 36,925 |
Balance at End of Period | $ 101,925 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Dilutive Common Stock Equivalents (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Dilutive common stock equivalents | 2,860,396 | 2,292,066 |
Convertible Preferred Stock [Member] | ||
Dilutive common stock equivalents | 2,214,729 | 2,006,399 |
Stock Option [Member] | ||
Dilutive common stock equivalents | 585,667 | 285,667 |
Warrant [Member] | ||
Dilutive common stock equivalents | 60,000 |
Going Concern Considerations (D
Going Concern Considerations (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ (10,043,044) | $ (9,735,421) | |
Working capital | (582,934) | ||
Net loss | $ (307,623) | $ (145,458) |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 309,526 | $ 269,024 |
Less reserve for obsolete inventory | ||
Total | $ 309,526 | $ 269,024 |
Prepaid Expenses (Details Narra
Prepaid Expenses (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 0 | $ 1,926 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 60,965 | $ 69,023 | $ 263,864 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Office furniture and fixtures | $ 78,690 | $ 76,907 |
Computer equipment | 31,317 | 30,678 |
Rental equipment | 67,622 | 66,090 |
Appliques | 2,160,096 | 2,160,096 |
Website development | 23,341 | 23,061 |
Less accumulated depreciation | (900,971) | (836,987) |
Total | $ 1,460,095 | $ 1,519,845 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | Feb. 19, 2015 | Dec. 10, 2014 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Amortization expense | $ 6,250 | $ 6,250 | |||
Common stock par value | $ 0.0001 | $ 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 ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Total | $ 193,750 | $ 200,000 |
Intangible Assets [Member] | ||
2019 | 18,750 | |
2020 | 25,000 | |
2021 | 25,000 | |
2022 | 25,000 | |
2023 and thereafter | 50,000 | |
Total | $ 143,750 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Other Liabilities - Schedule of Accounts Payable and Accrued Other Liabilities (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 739,599 | $ 625,157 |
Rental deposits | 21,698 | 22,991 |
Customer deposits payable | 41,833 | 37,099 |
Accrued wages & payroll liabilities | 13,409 | 14,807 |
Property tax payable | 27,246 | 31,955 |
VAT liability & sales tax payable | 63,654 | 47,875 |
Pre-merger accrued other liabilities | 65,948 | 65,948 |
Accrued other liabilities | 25,343 | 28,634 |
Total | $ 998,730 | $ 874,466 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | Jan. 14, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Amortization for discount to convertible notes | $ 17,595 | $ 0 | |
Convertible Notes [Member] | |||
Principal amount of original issue discount | 84,500 | ||
Aggregate purchase price | 65,000 | ||
Convertible Debentures [Member] | |||
Convertible promissory note issued | $ 84,500 | $ 0 | |
Power Up Lending Group Ltd. [Member] | |||
Note term | 1 year | ||
Note convertible percentage | 61.00% | ||
Note default interest rate | 22.00% | ||
Power Up Lending Group Ltd. [Member] | Minimum [Member] | |||
Note pre-payment percentage | 115.00% | ||
Power Up Lending Group Ltd. [Member] | Maximum [Member] | |||
Note pre-payment percentage | 140.00% | ||
Securities Purchase Agreement [Member] | Power Up Lending Group Ltd. [Member] | |||
Convertible promissory note issued | $ 65,000 | ||
Note bears interest rate | 12.00% | ||
Outstanding shares of common stock percentage | 4.99% |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Amortization for discount to convertible notes | $ 17,595 | $ 0 | |
Unamortized discount | 66,905 | $ 66,905 | |
Derivative liabilities recognized value | 101,925 | ||
Change in convertible note payable | $ 36,925 |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Conversion Feature Derivative Liability (Details) - Conversion Feature Derivative Liability [Member] | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Balance at Beginning of Period | |
Derivative liability | 65,000 |
Change in fair value included in earnings | 36,925 |
Balance at End of Period | $ 101,925 |
Derivative Liabilities - Sche_2
Derivative Liabilities - Schedule of Assumptions for Fair Value of Convertible Instruments Granted Under Black-scholes Option Pricing Model (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Expected Volatility [Member] | |
Fair value assumptions, measurement input, percentages | 328.00% |
Expected Term - Years [Member] | |
Fair value assumptions, measurement input, term | 9 months 14 days |
Risk-Free Interest Rate [Member] | |
Fair value assumptions, measurement input, percentages | 2.57% |
Expected Dividend Yield [Member] | |
Fair value assumptions, measurement input, percentages | 0.00% |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Dec. 18, 2018 | Oct. 02, 2018 | Jul. 14, 2018 | Jul. 02, 2018 | Jun. 14, 2018 | Mar. 08, 2018 | May 26, 2017 | Dec. 16, 2016 | Dec. 28, 2015 | Feb. 19, 2015 | Mar. 28, 2014 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 05, 2017 | Mar. 05, 2016 |
Common stock, shares authorized | 750,000,000 | 750,000,000 | 200,000,000 | ||||||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||||||||||||||||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 20,000,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||||||||||||||
Authorized capital | 220,000,000 | ||||||||||||||||||
Reverse split | reversed split for a ratio of 1 for 150 | effecting a 1:150 reverse split | |||||||||||||||||
Common stock, shares issued | 1,260,804 | ||||||||||||||||||
Common stock, shares outstanding | 140,224,577 | 1,260,804 | 936,519 | 936,519 | |||||||||||||||
Stock based compensation | $ 219,518 | ||||||||||||||||||
Number of option cancelled | |||||||||||||||||||
Number of stock options granted during the period | |||||||||||||||||||
Stock option outstanding intrinsic value | $ 175,700 | ||||||||||||||||||
Stock warrants outstanding | 60,000 | 60,000 | |||||||||||||||||
2018 Incentive Plan [Member] | |||||||||||||||||||
Purchase price per share | $ 1.38 | ||||||||||||||||||
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 | ||||||||||||||||||
Stock option expire date | Jul. 1, 2021 | ||||||||||||||||||
Number of stock options vesting during the period, value | $ 47,222 | $ 47,422 | $ 68,750 | ||||||||||||||||
Number of stock options vesting during the period | 34,375 | 34,375 | |||||||||||||||||
Number of stock options vesting during the period, value per option | $ 1.38 | $ 1.38 | |||||||||||||||||
Strike price | $ 1.50 | ||||||||||||||||||
Fair value assumptions, expected volatility rate | 607.00% | 718.00% | |||||||||||||||||
Fair value assumptions, expected term | 3 years | 3 years | |||||||||||||||||
Fair value assumptions, expected risk free interest rate | 2.64% | 2.69% | |||||||||||||||||
Stock based compensation | $ 81,698 | ||||||||||||||||||
Number of option cancelled | 206,250 | ||||||||||||||||||
2014 Equity Incentive Plan [Member] | |||||||||||||||||||
Stock option term | 10 years | ||||||||||||||||||
Purchase price per share | $ 1.50 | ||||||||||||||||||
Stock option exercise price per share | $ 3 | ||||||||||||||||||
Number of stock options vesting during the period, value | $ 600,000 | ||||||||||||||||||
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 based compensation | $ 600,000 | ||||||||||||||||||
Stock option to purchase of shares of common stock as compensation for services provided | 33,333 | ||||||||||||||||||
Number of stock options granted during the period | 200,000 | ||||||||||||||||||
2014 Equity Incentive Plan [Member] | Mr. Carlise [Member] | |||||||||||||||||||
Stock option term | 10 years | ||||||||||||||||||
Purchase price per share | $ 195.02 | ||||||||||||||||||
Stock option exercise price per share | $ 7.50 | ||||||||||||||||||
Stock option expire date | Dec. 31, 2025 | ||||||||||||||||||
Number of stock options vesting during the period, value | $ 650,000 | ||||||||||||||||||
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 | ||||||||||||||||||
Number of stock options granted during the period | 3,333 | ||||||||||||||||||
2014 Equity Incentive Plan [Member] | Mr. Delgado [Member] | |||||||||||||||||||
Stock option term | 10 years | ||||||||||||||||||
Purchase price per share | $ 195.02 | ||||||||||||||||||
Stock option exercise price per share | $ 7.50 | ||||||||||||||||||
Stock option expire date | Dec. 31, 2025 | ||||||||||||||||||
Number of stock options vesting during the period, value | $ 260,000 | ||||||||||||||||||
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 | ||||||||||||||||||
Number of stock options granted during the period | 1,333 | ||||||||||||||||||
2014 Equity Incentive Plan [Member] | Mr. Phipps [Member] | |||||||||||||||||||
Stock option term | 10 years | ||||||||||||||||||
Purchase price per share | $ 2.85 | ||||||||||||||||||
Stock option exercise price per share | $ 1.50 | ||||||||||||||||||
Number of stock options vesting during the period, value | $ 190,000 | ||||||||||||||||||
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 | ||||||||||||||||||
Number of stock options granted during the period | 66,667 | ||||||||||||||||||
Hector Delgado [Member] | |||||||||||||||||||
Stock option to purchase of shares of common stock as compensation for services provided | 8,333 | ||||||||||||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 20,000 | ||||||||||||||||||
Preferred stock, shares issued | |||||||||||||||||||
Preferred stock, shares outstanding | |||||||||||||||||||
Series B Convertible Preferred Stock [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 30,000 | ||||||||||||||||||
Preferred stock, shares issued | 3,333 | ||||||||||||||||||
Preferred stock, shares outstanding | 3,333 | ||||||||||||||||||
Series C Convertible Preferred Stock [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 4,000,000 | ||||||||||||||||||
Preferred stock, shares issued | 1,913,676 | ||||||||||||||||||
Preferred stock, shares outstanding | 1,913,676 | ||||||||||||||||||
Series D Convertible Preferred Stock [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 5,000,000 | ||||||||||||||||||
Preferred stock, shares issued | 2,892,109 | ||||||||||||||||||
Preferred stock, shares outstanding | 2,892,109 | ||||||||||||||||||
Series E Convertible Preferred Stock [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 8,746,000 | ||||||||||||||||||
Preferred stock, shares issued | 5,174,200 | ||||||||||||||||||
Preferred stock, shares outstanding | 5,174,200 | ||||||||||||||||||
Preferred Series F [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 1,100,000 | ||||||||||||||||||
Preferred stock, shares issued | 349,999 | ||||||||||||||||||
Preferred stock, shares outstanding | 349,999 | ||||||||||||||||||
Preferred Series G [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 10,090,000 | ||||||||||||||||||
Preferred stock, shares issued | 5,202,602 | ||||||||||||||||||
Preferred stock, shares outstanding | 5,202,602 | ||||||||||||||||||
Preferred Series H [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 200,000 | ||||||||||||||||||
Preferred stock, shares issued | 13,741 | ||||||||||||||||||
Preferred stock, shares outstanding | 13,741 | ||||||||||||||||||
Preferred Series I [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 114,944 | ||||||||||||||||||
Preferred stock, shares issued | 49,110 | ||||||||||||||||||
Preferred stock, shares outstanding | 49,110 | ||||||||||||||||||
Preferred Series J [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 125,000 | ||||||||||||||||||
Preferred stock, shares issued | 64,698 | ||||||||||||||||||
Preferred stock, shares outstanding | 64,698 | ||||||||||||||||||
Preferred Series K [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 1,250,000 | ||||||||||||||||||
Preferred stock, shares issued | 1,156,866 | ||||||||||||||||||
Preferred stock, shares outstanding | 1,156,866 | ||||||||||||||||||
Preferred Series L [Member] | |||||||||||||||||||
Preferred stock, shares authorized | 100,000 | ||||||||||||||||||
Preferred stock, shares issued | 30,000 | ||||||||||||||||||
Preferred stock, shares outstanding | 30,000 | ||||||||||||||||||
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 | $ 0.17 | $ 1.60 | |||||||||||||||||
Two Key Employees [Member] | 2018 Incentive Plan [Member] | |||||||||||||||||||
Number of option cancelled | 75,000 | ||||||||||||||||||
Stock option to purchase of shares of common stock as compensation for services provided | 275,000 | ||||||||||||||||||
Executives and Directors [Member] | 2018 Incentive Plan [Member] | |||||||||||||||||||
Purchase price per share | $ 0.15 | ||||||||||||||||||
Number of new stock options issued during the period | 831,250 | ||||||||||||||||||
Stock option exercise price per share | $ 0.15 | ||||||||||||||||||
Stock option expire date | Dec. 17, 2023 | ||||||||||||||||||
Number of stock options vesting during the period, value | $ 124,674 | ||||||||||||||||||
Strike price | $ 0.15 | ||||||||||||||||||
Fair value assumptions, expected volatility rate | 773.00% | ||||||||||||||||||
Fair value assumptions, expected term | 5 years | ||||||||||||||||||
Fair value assumptions, expected risk free interest rate | 2.69% | ||||||||||||||||||
Mr. Rector [Member] | Common Stock [Member] | |||||||||||||||||||
Stock option term | 7 years | ||||||||||||||||||
Purchase price per share | $ 7.50 | ||||||||||||||||||
Stock option exercise price per share | $ 7.50 | ||||||||||||||||||
Stock option expire date | Feb. 28, 2022 | ||||||||||||||||||
Number of stock options vesting during the period, value | $ 107,500 | ||||||||||||||||||
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 | ||||||||||||||||||
Number of stock options granted during the period | 14,333 | ||||||||||||||||||
Individuals [Member] | |||||||||||||||||||
Stock option to purchase of shares of common stock as compensation for services provided | 133,333 | ||||||||||||||||||
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 Cancelled (Details) | 3 Months Ended |
Mar. 31, 2019shares | |
Number of options cancelled issued during the period | |
David Phipps, President, CEO, and Director [Member] | |
Number of options cancelled issued during the period | (75,000) |
Theresa Carlise, CFO [Member] | |
Number of options cancelled issued during the period | (37,500) |
Hector Delgado, Director [Member] | |
Number of options cancelled issued during the period | (18,750) |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Exercise of shares (Details) - $ / shares | Jan. 18, 2019 | Mar. 31, 2019 |
Options Exercised | 600,000 | 600,000 |
Exercise Price | $ 0.16 | |
Shares withheld as Payment | 275,715 | |
Common Stock Issued | 324,285 | |
David Phipps [Member] | ||
Options Exercised | 325,000 | |
Exercise Price | $ 0.17 | |
Market Price | $ 0.35 | |
Shares withheld as Payment | 157,857 | |
Common Stock Issued | 167,143 | |
Other [Member] | ||
Options Exercised | 275,000 | |
Exercise Price | $ 0.15 | |
Market Price | $ 0.35 | |
Shares withheld as Payment | 117,858 | |
Common Stock Issued | 157,142 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Outstanding Stock Options Activities (Details) - $ / shares | Jan. 18, 2019 | Mar. 31, 2019 |
Equity [Abstract] | ||
Number of Options, Outstanding Balance Beginning | 1,185,667 | |
Number of Options, Granted | ||
Number of Options, Exercised | (600,000) | (600,000) |
Number of Options, Forfeited | ||
Number of Options, Cancelled | ||
Number of Options, Outstanding Balance Ending | 585,667 | |
Number of Options Exercisable | 585,667 | |
Weighted Average Exercise Price, Outstanding Balance Beginning | $ 0.66 | |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Exercised | 0.16 | |
Weighted Average Exercise Price, Forfeited | ||
Weighted Average Exercise Price, Cancelled | ||
Weighted Average Exercise Price, Outstanding Balance Ending | $ 1.166 | |
Weighted Average Remaining Contractual Life (Years), Beginning Outstanding | 5 years 6 months 21 days | |
Weighted Average Remaining Contractual Life (Years), Granted | 0 years | |
Weighted Average Remaining Contractual Life (Years), Exercised | 4 years 8 months 19 days | |
Weighted Average Remaining Contractual Life (Years), Cancelled | 0 years | |
Weighted Average Remaining Contractual Life (Years), Ending Outstanding | 5 years 11 months 1 day |
Stockholders' Equity - Schedu_4
Stockholders' Equity - Schedule of Outstanding Stock Warrants Activities (Details) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Stockholders Equity - Schedule Of Outstanding Stock Warrants Activities | |
Number of warrants, Beginning Balance | shares | 60,000 |
Number of warrants, Granted | shares | |
Number of warrants, Exercised | shares | |
Number of warrants, Forfeited | shares | |
Number of warrants, Cancelled | shares | |
Number of warrants, Ending Balance | shares | 60,000 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 4 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Weighted Average Exercise Price, Cancelled | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 4 |
Weighted Average Remaining Contractual Life (Years), Beginning Balance | 2 years 4 months 13 days |
Weighted Average Remaining Contractual Life (Years), Granted | 0 years |
Weighted Average Remaining Contractual Life (Years), Ending Balance | 2 years 1 month 13 days |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | May 11, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Feb. 15, 2015 |
Note payable related party | $ 56,161 | $ 11,540 | |||
Due to related Parties | 56,161 | 39,027 | |||
David Phipps [Member] | |||||
Accrued wages | 18,367 | ||||
Advances for inventory and services | 27,240 | ||||
Payment due to related party | 45,607 | $ 39,027 | |||
Hector Delgado [Member] | |||||
Due to related Parties | 10,000 | ||||
Theresa Carlise [Member] | |||||
Due to related Parties | 554 | ||||
Two Individuals Related to Mr.Phipps [Member] | |||||
Gross wages paid | $ 18,117 | $ 19,121 | |||
Chief Executive Officer [Member] | Share Exchange Agreement [Member] | |||||
Note payable related party | $ 122,536 | ||||
Repayments of related party debt | $ 5,768 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Jun. 14, 2018USD ($) | Jun. 14, 2018GBP (£) | Dec. 31, 2018USD ($) | Dec. 31, 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 | $ 62,219 | ||
Employment agreement term | 1 year | 1 year | ||
Average conversion rate | 1.296229 | 1.296229 | ||
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 | |||
Amount agreed to provide prior to the agreement | $ 140,000 | |||
Executive Employment Agreement [Member] | David Phipps [Member] | ||||
Employment agreement term description | Previously the Company had a two-year Executive Employment Agreement with Mr. Phipps, effective January 1, 2016 | Previously the Company had a two-year Executive Employment Agreement with Mr. Phipps, effective January 1, 2016 | ||
Annual salary | $ 144,000 | $ 61,833 | ||
Average conversion rate | 1.288190 | 1.288190 | ||
Executive Employment Agreement [Member] | David Phipps [Member] | GBP [Member] | ||||
Annual salary | £ | £ 48,000 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Concentration risk percentage | 10.00% | |
Sales Revenue, Net [Member] | ||
Concentration risk percentage | 36.20% | 29.20% |
Concentrations - Schedule of Co
Concentrations - Schedule of Concentration Risk (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Concentration risk percentage | 10.00% | |
Globalstar Europe [Member] | ||
Purchases | $ 140,736 | $ 184,603 |
Concentration risk percentage | 13.50% | 22.70% |
Garmin [Member] | ||
Purchases | $ 134,778 | $ 166,877 |
Concentration risk percentage | 13.00% | 20.50% |
Network Innovations [Member] | ||
Purchases | $ 309,450 | $ 463,760 |
Concentration risk percentage | 29.80% | 57.10% |
Cyngus Telecom [Member] | ||
Purchases | $ 127,917 | $ 120,796 |
Concentration risk percentage | 12.30% | 14.90% |
Satcom Global [Member] | ||
Purchases | $ 5,580 | $ 66,913 |
Concentration risk percentage | 0.50% | 8.20% |
Concentrations - Schedule of _2
Concentrations - Schedule of Concentration Risk (Details) (Parenthetical) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Concentration risk | 10.00% | |
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 | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | $ 1,298,371 | $ 1,667,938 |
Concentration risk percentage | 10.00% | |
Europe [Member] | ||
Revenue | $ 998,854 | $ 1,015,391 |
Concentration risk percentage | 77.00% | 60.90% |
North America [Member] | ||
Revenue | $ 189,466 | $ 483,579 |
Concentration risk percentage | 14.60% | 29.00% |
South America [Member] | ||
Revenue | $ 19,791 | $ 72,803 |
Concentration risk percentage | 1.50% | 4.40% |
Asia and Pacific [Member] | ||
Revenue | $ 77,949 | $ 71,425 |
Concentration risk percentage | 6.00% | 4.30% |
Africa [Member] | ||
Revenue | $ 11,312 | $ 24,739 |
Concentration risk percentage | 0.90% | 1.50% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | May 14, 2019 | May 13, 2019 | May 13, 2019 | Apr. 30, 2019 | Apr. 22, 2019 | Apr. 09, 2019 | Jan. 14, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Proceeds of convertible notes payable | $ 65,000 | ||||||||
Power Up Lending Group Ltd. [Member] | |||||||||
Debt instrument, term | 1 year | ||||||||
Securities Purchase Agreement [Member] | Power Up Lending Group Ltd. [Member] | |||||||||
Note bears interest rate | 12.00% | ||||||||
Subsequent Event [Member] | Note Exchange Agreement [Member] | |||||||||
Conversion of stock, shares issued | 10,827,850 | ||||||||
Conversion of stock, shares converted | 5,208,149 | ||||||||
Outstanding shares of preferred stock percentage | 99.40% | ||||||||
Note bears interest rate | 6.00% | ||||||||
Subsequent Event [Member] | Note Exchange Agreement [Member] | Promissory Note [Member] | |||||||||
Note bears interest rate | 12.00% | ||||||||
Repayments of notes | $ 43,284 | ||||||||
Notes payable remaining balance | 124,986 | ||||||||
Subsequent Event [Member] | Note Purchase Agreement [Member] | |||||||||
Proceeds of convertible notes payable | $ 805,000 | ||||||||
Debt instrument annual interest rate | 12.00% | ||||||||
Debt instrument, description | The holders of the Notes (the “Holders”) have an optional right of conversion. A Holder may elect to convert its Note, and all of the Indebtedness outstanding as of such time, into the number of fully paid and non-assessable shares of Common Stock (the “Conversion Shares”) as determined by dividing the Indebtedness by $0.10, subject to certain adjustments, but excluding adjustment for a reserve stock split of no more than 1:20 contemplated by the Company at the Issue Date. The optional right of conversion is subject to a beneficial ownership limitation of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion. | ||||||||
Subsequent Event [Member] | Note Purchase Agreement [Member] | Convertible Promissory Notes [Member] | |||||||||
Note bears interest rate | 6.00% | 6.00% | |||||||
Proceeds of convertible notes payable | $ 650,000 | ||||||||
Subsequent Event [Member] | Note Purchase Agreement [Member] | Additional 20% Convertible Promissory Notes [Member] | |||||||||
Proceeds of convertible notes payable | $ 130,000 | ||||||||
Subsequent Event [Member] | Consulting Agreement 1 [Member] | Convertible Promissory Notes [Member] | |||||||||
Proceeds of convertible notes payable | $ 44,000 | ||||||||
Subsequent Event [Member] | Consulting Agreement 2 [Member] | Convertible Promissory Notes [Member] | |||||||||
Proceeds of convertible notes payable | $ 12,500 | ||||||||
Debt instrument, term | 3 years | ||||||||
Subsequent Event [Member] | Consulting Agreement [Member] | Convertible Promissory Notes [Member] | |||||||||
Note bears interest rate | 6.00% | 6.00% | |||||||
Subsequent Event [Member] | Consulting Agreement [Member] | Convertible Promissory Notes [Member] | Minimum [Member] | |||||||||
Debt instrument retainer payment | $ 10,000 | $ 10,000 | |||||||
Debt instrument monthly payment | 5,000 | ||||||||
Subsequent Event [Member] | Consulting Agreement [Member] | Convertible Promissory Notes [Member] | Maximum [Member] | |||||||||
Debt instrument retainer payment | 30,000 | $ 30,000 | |||||||
Debt instrument monthly payment | $ 10,000 | ||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Power Up Lending Group Ltd. [Member] | |||||||||
Repayments of notes | 87,778 | ||||||||
Debt instrument, principal | 65,000 | ||||||||
Debt instrument, prepayment penalty | 19,500 | ||||||||
Accrued interest | $ 3,278 | ||||||||
Subsequent Event [Member] | Preferred Series C [Member] | |||||||||
Conversion of stock, shares issued | 4,052 | ||||||||
Conversion of stock, shares converted | 60,782 | ||||||||
Subsequent Event [Member] | Preferred Series C [Member] | Note Exchange Agreement [Member] | |||||||||
Conversion of stock, shares issued | 1,852,894 | ||||||||
Conversion of stock, shares converted | |||||||||
Subsequent Event [Member] | Preferred Series D [Member] | |||||||||
Conversion of stock, shares issued | 87,333 | ||||||||
Conversion of stock, shares converted | 655,000 | ||||||||
Subsequent Event [Member] | Preferred Series D [Member] | Note Exchange Agreement [Member] | |||||||||
Conversion of stock, shares issued | 2,213,660 | ||||||||
Conversion of stock, shares converted | 23,449 | ||||||||
Subsequent Event [Member] | Preferred Series K [Member] | |||||||||
Conversion of stock, shares issued | 39,963 | 25,568 | |||||||
Conversion of stock, shares converted | 59,945 | 38,352 | |||||||
Subsequent Event [Member] | Preferred Series K [Member] | Note Exchange Agreement [Member] | |||||||||
Conversion of stock, shares issued | 1,058,569 | ||||||||
Conversion of stock, shares converted | |||||||||
Subsequent Event [Member] | Preferred Series J [Member] | |||||||||
Conversion of stock, shares issued | 1,707 | ||||||||
Conversion of stock, shares converted | 256 | ||||||||
Subsequent Event [Member] | Preferred Series J [Member] | Note Exchange Agreement [Member] | |||||||||
Conversion of stock, shares issued | 64,442 | ||||||||
Conversion of stock, shares converted |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Exchange for Conversion of Preferred Shares for Promissory Notes (Details) - Subsequent Event [Member] | Apr. 30, 2019USD ($)Integershares | Apr. 22, 2019shares | Apr. 09, 2019shares |
Preferred Series C [Member] | |||
Aggregate Number of Shares Held by Converting Stockholders | 4,052 | ||
Number of Outstanding Shares Following Conversion | 60,782 | ||
Preferred Series D [Member] | |||
Aggregate Number of Shares Held by Converting Stockholders | 87,333 | ||
Number of Outstanding Shares Following Conversion | 655,000 | ||
Preferred Series J [Member] | |||
Aggregate Number of Shares Held by Converting Stockholders | 1,707 | ||
Number of Outstanding Shares Following Conversion | 256 | ||
Preferred Series K [Member] | |||
Aggregate Number of Shares Held by Converting Stockholders | 39,963 | 25,568 | |
Number of Outstanding Shares Following Conversion | 59,945 | 38,352 | |
Note Exchange Agreement [Member] | |||
Aggregate Number of Shares Held by Converting Stockholders | 10,827,850 | ||
Aggregate Principal Amount of Notes into which Shares Converted | $ | $ 168,270 | ||
Number of Outstanding Shares Following Conversion | 5,208,149 | ||
Note Exchange Agreement [Member] | Preferred Series B [Member] | |||
Number of Converting Holders of Preferred Stock | Integer | 1 | ||
Aggregate Number of Shares Held by Converting Stockholders | 3,333 | ||
Aggregate Principal Amount of Notes into which Shares Converted | $ | $ 11 | ||
Number of Outstanding Shares Following Conversion | |||
Note Exchange Agreement [Member] | Preferred Series C [Member] | |||
Number of Converting Holders of Preferred Stock | Integer | 1 | ||
Aggregate Number of Shares Held by Converting Stockholders | 1,852,894 | ||
Aggregate Principal Amount of Notes into which Shares Converted | $ | $ 12,353 | ||
Number of Outstanding Shares Following Conversion | |||
Note Exchange Agreement [Member] | Preferred Series D [Member] | |||
Number of Converting Holders of Preferred Stock | Integer | 3 | ||
Aggregate Number of Shares Held by Converting Stockholders | 2,213,660 | ||
Aggregate Principal Amount of Notes into which Shares Converted | $ | $ 29,516 | ||
Number of Outstanding Shares Following Conversion | 23,449 | ||
Note Exchange Agreement [Member] | Preferred Series E [Member] | |||
Number of Converting Holders of Preferred Stock | Integer | |||
Aggregate Number of Shares Held by Converting Stockholders | |||
Aggregate Principal Amount of Notes into which Shares Converted | $ | |||
Number of Outstanding Shares Following Conversion | 5,174,200 | ||
Note Exchange Agreement [Member] | Preferred Series F [Member] | |||
Number of Converting Holders of Preferred Stock | Integer | 1 | ||
Aggregate Number of Shares Held by Converting Stockholders | 349,999 | ||
Aggregate Principal Amount of Notes into which Shares Converted | $ | $ 233 | ||
Number of Outstanding Shares Following Conversion | |||
Note Exchange Agreement [Member] | Preferred Series G [Member] | |||
Number of Converting Holders of Preferred Stock | Integer | 2 | ||
Aggregate Number of Shares Held by Converting Stockholders | 5,202,602 | ||
Aggregate Principal Amount of Notes into which Shares Converted | $ | $ 3,468 | ||
Number of Outstanding Shares Following Conversion | |||
Note Exchange Agreement [Member] | Preferred Series H [Member] | |||
Number of Converting Holders of Preferred Stock | Integer | 3 | ||
Aggregate Number of Shares Held by Converting Stockholders | 13,741 | ||
Aggregate Principal Amount of Notes into which Shares Converted | $ | $ 916 | ||
Number of Outstanding Shares Following Conversion | |||
Note Exchange Agreement [Member] | Preferred Series I [Member] | |||
Number of Converting Holders of Preferred Stock | Integer | 3 | ||
Aggregate Number of Shares Held by Converting Stockholders | 48,610 | ||
Aggregate Principal Amount of Notes into which Shares Converted | $ | $ 3,241 | ||
Number of Outstanding Shares Following Conversion | 500 | ||
Note Exchange Agreement [Member] | Preferred Series J [Member] | |||
Number of Converting Holders of Preferred Stock | Integer | 5 | ||
Aggregate Number of Shares Held by Converting Stockholders | 64,442 | ||
Aggregate Principal Amount of Notes into which Shares Converted | $ | $ 42,961 | ||
Number of Outstanding Shares Following Conversion | |||
Note Exchange Agreement [Member] | Preferred Series K [Member] | |||
Number of Converting Holders of Preferred Stock | Integer | 7 | ||
Aggregate Number of Shares Held by Converting Stockholders | 1,058,569 | ||
Aggregate Principal Amount of Notes into which Shares Converted | $ | $ 70,571 | ||
Number of Outstanding Shares Following Conversion | |||
Note Exchange Agreement [Member] | Preferred Series L [Member] | |||
Number of Converting Holders of Preferred Stock | Integer | 3 | ||
Aggregate Number of Shares Held by Converting Stockholders | 20,000 | ||
Aggregate Principal Amount of Notes into which Shares Converted | $ | $ 5,000 | ||
Number of Outstanding Shares Following Conversion | 10,000 |