Document and Entity Information
Document and Entity Information - USD ($) | Apr. 02, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Details | |||
Registrant Name | FULLNET COMMUNICATIONS INC | ||
Registrant CIK | 1,092,570 | ||
SEC Form | 10-K | ||
Period End date | Dec. 31, 2017 | ||
Fiscal Year End | --12-31 | ||
Trading Symbol | fulo | ||
Tax Identification Number (TIN) | 731,473,361 | ||
Number of common stock shares outstanding | 11,871,009 | ||
Public Float | $ 230,109 | ||
Filer Category | Smaller Reporting Company | ||
Current with reporting | Yes | ||
Voluntary filer | No | ||
Well-known Seasoned Issuer | No | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, State Country Name | OKLAHOMA | ||
Entity Address, Address Line One | 201 Robert S. Kerr Avenue, Suite 210 | ||
Entity Address, City or Town | Oklahoma City | ||
Entity Address, State or Province | Oklahoma | ||
Entity Address, Postal Zip Code | 73,102 | ||
City Area Code | 405 | ||
Local Phone Number | 236-8200 | ||
Entity Listing, Par Value Per Share | $ 0.00001 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
CURRENT ASSETS | |||
Cash | $ 29,399 | $ 19,383 | |
Accounts receivable, net | 8,854 | 6,614 | |
Prepaid expenses and other current assets | 6,110 | 1,541 | |
Total current assets | 44,363 | 27,538 | |
PROPERTY AND EQUIPMENT, net | 39,448 | 46,710 | |
OTHER ASSETS AND INTANGIBLE ASSETS | 21,813 | 30,864 | |
ASSETS OF DISCONTINUED OPERATIONS, net (NOTE I) | [1] | 29,343 | 32,970 |
TOTAL ASSETS | 134,967 | 138,082 | |
CURRENT LIABILITIES | |||
Accounts payable | 37,371 | 79,816 | |
Accounts payable, related party | 7,982 | 13,935 | |
Accrued and other liabilities | 610,107 | 548,962 | |
Convertible notes payable, related party - current portion | 5,354 | 5,044 | |
Deferred revenue | 397,931 | 369,248 | |
Total current liabilities | 1,058,745 | 1,017,005 | |
CONVERTIBLE NOTES PAYABLE, related party - less current portion | 27,888 | 33,242 | |
LIABILITIES OF DISCONTINUED OPERATIONS (NOTE I) | [1] | 193,812 | 219,185 |
Total liabilities | 1,280,445 | 1,269,432 | |
STOCKHOLDERS' DEFICIT | |||
Preferred Stock, Value | 618,675 | 591,776 | |
Common Stock, Value | 119 | 119 | |
Additional paid-in capital | 8,640,769 | 8,655,009 | |
Accumulated deficit | (10,405,041) | (10,378,254) | |
Total stockholders' deficit | (1,145,478) | (1,131,350) | |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 134,967 | $ 138,082 | |
[1] | See Note I. |
CONSOLIDATED BALANCE SHEETS - P
CONSOLIDATED BALANCE SHEETS - Parenthetical - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 987,102 | 987,102 |
Preferred Stock, Shares Outstanding | 987,102 | 987,102 |
Common Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 |
Common Stock, Shares Authorized | 40,000,000 | 40,000,000 |
Common Stock, Shares, Issued | 11,871,009 | 11,871,009 |
Common Stock, Shares, Outstanding | 11,871,009 | 11,871,009 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
REVENUES | |||
Access service revenues | $ 45,977 | $ 60,134 | |
Colocation and other revenues | 1,843,636 | 1,718,492 | |
Total revenues | 1,889,613 | 1,778,626 | |
OPERATING COSTS AND EXPENSES | |||
Cost of access service revenues | 10,426 | 38,277 | |
Cost of colocation and other revenues | 159,230 | 123,329 | |
Selling, general and administrative expenses | 1,623,242 | 1,537,543 | |
Depreciation and amortization | 17,783 | 18,382 | |
Total operating costs and expenses | 1,810,681 | 1,717,531 | |
INCOME FROM OPERATIONS | 78,932 | 61,095 | |
INTEREST EXPENSE | (2,160) | (2,453) | |
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | 76,772 | 58,642 | |
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | [1] | (103,559) | (64,600) |
Net Income (Loss) Attributable to Parent | (26,787) | (5,958) | |
Preferred stock dividends | (26,899) | (47,073) | |
Net loss available to common stockholders | $ (53,686) | $ (53,031) | |
Earnings Per Share | |||
Continuing operations - basic | $ 0.01 | $ 0.01 | |
Continuing operations - diluted | 0.01 | 0.01 | |
Discontinued operations - basic and diluted | (0.01) | (0.01) | |
Earnings Per Share, Basic and Diluted | $ 0 | $ (0.01) | |
Weighted Average Number of Shares Outstanding, Basic | 11,871,009 | 9,298,676 | |
Weighted Average Number of Shares Outstanding, Diluted | 14,865,058 | 10,929,224 | |
[1] | See Note I. |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT - USD ($) | Common Stock | Preferred Stock | Additional Paid In Capital | Accumulated Deficit | Total |
Equity Balance, Starting at Dec. 31, 2015 | $ 91 | $ 544,703 | $ 8,640,542 | $ (10,372,296) | $ (1,186,960) |
Shares Outstanding, Starting at Dec. 31, 2015 | 9,118,161 | 987,102 | |||
Stock Granted, Value, Share-based Compensation, Net of Forfeitures | $ 0 | $ 0 | 53,309 | 0 | 53,309 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 0 | 0 | |||
Stock Issued During Period, Value, Stock Options Exercised | $ 28 | 8,231 | $ 8,259 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 2,752,848 | (2,752,848) | |||
Amortization of increasing dividend rate preferred stock discount | $ 0 | $ 47,073 | (47,073) | 0 | $ 0 |
Net Income (Loss) | $ 0 | $ 0 | 0 | (5,958) | (5,958) |
Shares Outstanding, Ending at Dec. 31, 2016 | 11,871,009 | 987,102 | |||
Equity Balance, Ending at Dec. 31, 2016 | $ 119 | $ 591,776 | 8,655,009 | (10,378,254) | (1,131,350) |
Stock Granted, Value, Share-based Compensation, Net of Forfeitures | 0 | 0 | 12,659 | 0 | 12,659 |
Amortization of increasing dividend rate preferred stock discount | 0 | 26,899 | (26,899) | 0 | 0 |
Net Income (Loss) | $ 0 | $ 0 | 0 | (26,787) | (26,787) |
Shares Outstanding, Ending at Dec. 31, 2017 | 11,871,009 | 987,102 | |||
Equity Balance, Ending at Dec. 31, 2017 | $ 119 | $ 618,675 | $ 8,640,769 | $ (10,405,041) | $ (1,145,478) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | $ (26,787) | $ (5,958) | |
Adjustments to reconcile net loss to net cash provided by operating activities | |||
Loss from discontinued operations | [1] | 103,559 | 64,600 |
Depreciation and amortization | 17,783 | 18,382 | |
Stock options compensation | 12,659 | 53,309 | |
Provision for uncollectible accounts receivable | 480 | 700 | |
Net (increase) decrease in | |||
Accounts receivable | (2,720) | (1,006) | |
Prepaid expenses and other current assets | (4,569) | (647) | |
Accounts payable | (42,445) | (36,497) | |
Accounts payable, related party | (5,953) | 4,540 | |
Accrued and other liabilities | 61,145 | 39,237 | |
Deferred revenue | 28,683 | 13,703 | |
Net cash provided by operating activities | 141,835 | 150,363 | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Cash paid for property and equipment | (1,470) | (6,596) | |
Cash paid for intangible assets | 0 | (10,500) | |
Net cash used in investing activities | (1,470) | (17,096) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Principal payments on borrowings under notes payable - related party | (5,044) | (4,751) | |
Net cash used in financing activities | (5,044) | (4,751) | |
DISCONTINUED OPERATIONS | |||
Net cash used in operating activities | (92,151) | (98,174) | |
Net cash used in investing activities | (4,780) | 0 | |
Net cash used in financing activities | (28,374) | (26,833) | |
Net cash used in discontinued operations | (125,305) | (125,007) | |
NET INCREASE IN CASH - CONTINUING OPERATIONS | 10,016 | 3,509 | |
Cash and Cash Equivalents, at Carrying Value, Beginning Balance | 19,383 | 15,874 | |
Cash and Cash Equivalents, at Carrying Value, Ending Balance | 29,399 | 19,383 | |
Supplemental Cash Flow Information | |||
Income Taxes Paid, Net | 0 | 0 | |
Interest Paid | 2,161 | 2,453 | |
Interest Paid, Discontinued Operations | [1] | 11,185 | 12,774 |
Cash Flow, Noncash Investing and Financing Activities Disclosure | |||
Intangible asset purchased on account | 0 | 16,000 | |
Amortization of increasing dividend rate preferred stock discount | 26,899 | 47,073 | |
Exercise of options by reducing deferred compensation payable | $ 0 | $ 8,259 | |
[1] | See Note I. |
NOTE A - SUMMARY OF ACCOUNTING
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS | NOTE A — SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows. Nature of Operations FullNet Communications, Inc. and Subsidiaries (the Company) is an integrated communications provider offering Internet access, web hosting, equipment colocation, customized live help desk outsourcing services, group text and voice message delivery services, traditional telephone services as well as advanced voice and data solutions to individuals, businesses, organizations, educational institutions and governmental agencies. Through its subsidiaries, FullNet, Inc., FullTel, Inc., FullWeb, Inc. and CallMultiplier, Inc., the Company provides high quality, reliable and scalable Internet based solutions designed to meet customer needs. Services offered include: Dial-up and direct high-speed connectivity to the Internet through the FullNet brand name; Backbone services to private label Internet services providers (ISPs) and businesses; Carrier-neutral telecommunications premise colocation; Web page hosting; Equipment colocation; Customized live help desk outsourcing services; Group text and voice message delivery services; Advanced voice and data solutions; and Traditional telephone services. Consolidation The consolidated financial statements include the accounts of FullNet Communications, Inc. and its wholly owned subsidiaries FullNet, Inc., FullTel, Inc., FullWeb, Inc., and CallMultiplier, Inc.. All material inter-company accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures; accordingly, actual results could differ from those estimates. Cash Equivalents Cash equivalents are represented by operating accounts or money market accounts maintained with insured financial institutions which consist of highly liquid investments that mature in three months or less from date of purchase. Accounts Receivable The Company operates and grants credit, on an uncollateralized basis. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers comprising the Company’s customer base and their dispersion across different industries as well as the Company’s emphasis on obtaining deposits and/or payment in advance for services from the majority of its customers. During the year ended December 31, 2017 the Company had two customers that each comprised approximately 8% of total revenues. During the year ended December 31, 2016 the Company had two customers that comprised approximately 8% and 7% of total revenues, respectively. Due to consolidations resulting from a merger, the customer that comprised approximately 7% of total revenues in 2016, ended their relationship with the Company during the first quarter of 2017. 2017 2016 Computers and equipment $ 1,488,246 $ 1,488,246 Leasehold improvements 1,034,842 1,033,372 Software 58,041 58,041 Furniture and fixtures 39,284 39,284 2,620,413 2,618,943 Less accumulated depreciation (2,580,965) (2,572,233) $ 39,448 $ 46,710 Depreciation expense from continuing operations for the years ended December 31, 2017 and 2016 was $8,732 and $15,682, respectively. Depreciation expense from discontinued operations for the years ended December 31,2017 and 2016 was $10,353 and $10,148, respectively (see Note I). Long-Lived Assets All long-lived assets held and used by the Company, including intangible assets, are reviewed to determine whether any events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. In accordance with ASC 360-10-35 “Impairment or Disposal of Long-lived Assets”, the Company bases its evaluation on such impairment indicators as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, as well as other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of the asset may not be recoverable the Company determines whether impairment has occurred through the use of an undiscounted cash flows analysis of the asset. If impairment has occurred, the Company recognizes a loss for the difference between the carrying amount and the estimated value of the asset. No intangible assets were purchased in 2017. During the year ended December 31, 2016, $10,500 was paid for an intangible asset and $16,000 was purchased on account. The Company incurred impairment expense in 2017 or 2016. Amortization expense for the years ended December 31, 2017 and 2016 was $9,051 and $2,700, respectively. Revenue Recognition Revenues are reported on a monthly basis as services are provided, price is fixed and determinable, persuasive evidence of an arrangement exists and collectability of the resulting receivable is reasonably assured. Revenue that is received in advance of the services provided is deferred until the services are provided by the Company. Revenue related to set up charges is also deferred and amortized over the life of the contract. Revenues are presented net of taxes and fees billed to customers and remitted to governmental authorities. Advertising The Company expenses advertising production costs as they are incurred and advertising communication costs the first time the advertising takes place. Advertising expense for the years ended December 31, 2017 and 2016 was $247,947 and $159,310, respectively. Income Taxes The Company accounts for income taxes utilizing the asset and liability method. Deferred income taxes are determined based on the differences between the financial reporting and tax bases of assets and liabilities, using enacted statutory tax rates in effect for the year in which the differences are expected to reverse. The effects of future changes in tax laws or rates are not included in the measurement. The Company recognizes the amount of taxes payable or refundable for the current year and recognizes deferred tax liabilities and assets for the expected future tax consequences of events and transactions that have been recognized in the Company’s financial statements or tax returns. The Company currently has substantial net operating loss carry forwards. The Company has recorded a 100% valuation allowance against net deferred tax assets due to uncertainty of their ultimate realization. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense and does not believe it has any material unrealized tax benefits at December 31, 2017. The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. Income (Loss) Per Share Income (loss) per share – basic is calculated by dividing net income (loss) by the weighted average number of shares of stock outstanding during the year, including shares issuable without additional consideration. Income per share – assuming dilution is calculated by dividing net income by the weighted average number of shares outstanding during the year adjusted for the effect of dilutive potential shares calculated using the treasury stock method. Reconciliation of basic and diluted income (loss) per share (“EPS”) are as follows: December 31, 2017 December 31, 2016 Net income (loss): Income from continuing operations $ 76,772 $ 58,642 Loss from discontinued operations – See Note I (103,559) (64,600) Net loss (26,787) (5,958) Preferred stock dividends (26,899) (47,073) Net loss available to common shareholders (53,686) (53,031) Basic income (loss) per share: Weighted-average common shares outstanding used in income (loss) per share computations 11,871,009 9,298,676 Basic income (loss) per share: Continuing operations 0.01 0.01 Discontinued operations – See Note I (0.01) (0.01) Basic income (loss) per share (0.00) (0.01) Diluted income (loss) per share: Shares used in diluted income (loss) per share computations 14,865,058 10,929,224 Diluted income (loss) per share Continuing operations 0.01 0.01 Discontinued operations – See Note I (0.01) (0.01) Diluted income (loss) per share (0.00) (0.01) Computation of shares used in income (loss) per share: Weighted average shares and share equivalents outstanding 11,871,009 9,298,676 Effect of preferred stock 987,102 987,102 Effect of dilutive stock options 1,775,872 423,384 Effect of dilutive warrants 231,075 220,062 Weighted average shares and share equivalents outstanding – assuming dilution 14,865,058 10,929,224 Schedule of Anti-dilutive Securities Excluded : December 31, 2017 December 31, 2016 Stock options 3,000 33,000 Convertible promissory notes 183,252 214,835 Total anti-dilutive securities excluded 186,252 247,835 Anti-dilutive securities consist of stock options and convertible promissory notes whose exercise price or conversion price, respectively, was greater than the average market price of the common stock. Stock-Based Compensation The Company does not have a written employee stock option plan. The Company has historically granted only employee stock options with an exercise price equal to the market price of the Company’s stock at the date of grant, a contractual term of ten years, and a vesting period of three years ratably on the first, second and third anniversaries of the date of grant (with limited exceptions). All employee stock options granted during 2017 and 2016 were nonqualified stock options. Stock-based compensation is measured at the grant date, based on the calculated fair value of the option, and is recognized as an expense on a straight-line basis over the requisite employee service period (generally the vesting period of the grant). The fair values of the granted options are estimated at the date of grant using the Black-Scholes option pricing model. See Note F – Common Stock and Stock-Based Compensation for further information on stock-based compensation. Beneficial Conversion Features The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon conversion, is treated as a discount to the convertible note payable. This discount is amortized over the period from the date of issuance to the date the note is due using the effective interest method. If the note payable is retired prior to the end of its contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the common shares at the commitment date to be received upon conversion. Related Parties 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. The Company has two secured convertible promissory notes from a shareholder. The note balances at December 31, 2017 were $116,592 and $33,242. The note balances at December 31, 2016 were $144,966 and $38,286 (see Note C – Convertible Notes Payable Related Party). Additionally, the Company had related party accounts payable to officers and directors for unpaid expense reimbursements in the amounts of $7,982 and $13,935 for years ending December 31, 2017 and 2016, respectively. Fair Value Measurements The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 820, “Fair Value Measurements and Disclosures”. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09, along with the related updates (“ASC 606”), will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. ASC 606 provides a unified model to determine how revenue is recognized. This new standard provides a five-step framework whereby revenue is recognized when promised goods or services are transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Two adoption methods are permitted: retrospectively to all prior reporting periods presented, with certain practical expedients permitted; or retrospectively with the cumulative effect of initially adopting the ASU recognized at the date of initial application. We adopted ASC 606 on its effective date, January 1, 2018, using the modified retrospective approach and do not expect the adoption of ASC 606 to have a material effect on our consolidated financial statements or disclosures. In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the least term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations cash flows or financial condition. |
NOTE B - GOING CONCERN
NOTE B - GOING CONCERN | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
NOTE B - GOING CONCERN | NOTE B — GOING CONCERN The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has sustained substantial net losses. At December 31, 2017 and 2016, current liabilities exceeded current assets by $1,014,385 and $989,467, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Certain reclassifications have been made to prior period balances to conform with the presentation for the current period. These reclassifications did not impact the net income. In view of the matters described in the preceding paragraph, the ability of the Company to continue as a going concern is dependent upon continued operations of the Company that in turn is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, to maintain present financing, to achieve the objectives of its business plan and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. The Company’s business plan includes, among other things, expansion through mergers and acquisitions and the development of its colocation and advanced voice and data solutions. Execution of the Company’s business plan will require significant capital to fund capital expenditures, working capital needs and debt service. Current cash balances will not be sufficient to fund the Company’s current business plan beyond the next few months. As a consequence, the Company is currently focusing on revenue enhancement and cost cutting opportunities as well as working to sell non-core assets and to extend vendor payment terms. The Company continues to seek additional convertible debt or equity financing as well as the placement of a credit facility to fund the Company’s liquidity. There can be no assurance that the Company will be able to obtain additional capital on satisfactory terms, or at all, or on terms that will not dilute the shareholders’ interests. |
NOTE C - CONVERTIBLE NOTES PAYA
NOTE C - CONVERTIBLE NOTES PAYABLE RELATED PARTY | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
NOTE C - CONVERTIBLE NOTES PAYABLE RELATED PARTY | NOTE C — CONVERTIBLE NOTES PAYABLE RELATED PARTY Notes payable consist of the following: (1) The note holder has the right to convert the note, in its entirety or in part, into common stock of the Company at the rate of $1.00 per share. During the years 2017 and 2016, the Company made principal payments totaling $28,374 and $26,833, respectively. The secured convertible promissory note had a balance of $116,592 at December 31, 2017 which is all short-term. The Company analyzed the conversion option for derivative accounting and beneficial conversion features consideration under ASC 815-15 “Derivatives and Hedging” and ASC 470-20 “Convertible Securities with Beneficial Conversion Features” and noted none. (2) The note holder has the right to convert the note, in its entirety or in part, into common stock of the Company at the rate of $1.00 per share. During the years 2017 and 2016, the Company made principal payments of $5,044 and $4,751, respectively. The secured convertible promissory note had a balance of $33,242 at December 31, 2017 of which $5,354 is short-term and $27,888 is long-term. This secured convertible promissory note is secured by certain equipment of the Company. Upon payment of the balance due on this secured convertible promissory note title of the equipment will be transferred to the Company free and clear of all liens and encumbrances. The Company analyzed the conversion option for derivative accounting and beneficial conversion features consideration under ASC 815-15 “Derivatives and Hedging” and ASC 470-20 “Convertible Securities with Beneficial Conversion Features” and noted none. 2018 $ 121,123 2019 5,685 2020 6,036 2021 6,408 2022 6,803 Thereafter 2,956 $ 149,011 |
NOTE D - COMMITMENTS AND CONTIN
NOTE D - COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
NOTE D - COMMITMENTS AND CONTINGENCIES | Year ending December 31 2018 221,782 2019 221,782 $ 443,564 Rental expense for all operating leases for the years ended December 31, 2017 and 2016 was approximately $297,364 and $313,675, respectively. The Company’s long-term non-cancelable operating lease includes scheduled base rental increases over the term of the lease. The total amount of the base rental payments is charged to expense on the straight-line method over the term of the lease. The Company had recorded a deferred credit of $13,046 at December 31, 2017, which is reflected in Accrued and Other Liabilities on the Balance Sheet to reflect the net excess of rental expense over cash payments since inception of the lease. In addition to the base rent payments the Company pays a monthly allocation of the building’s operating expenses. CONTINGENCIES As a provider of telecommunications, the Company is affected by regulatory proceedings in the ordinary course of its business at the state and federal levels. These include proceedings before both the Federal Communications Commission and the Oklahoma Corporation Commission (“OCC”). In addition, in its operations the Company relies on obtaining many of its underlying telecommunications services and/or facilities from incumbent local exchange carriers or other carriers pursuant to interconnection or other agreements or arrangements. In January 2007, the Company concluded a regulatory proceeding pursuant to the Federal Telecommunications Act of 1996 before the OCC relating to the terms of its interconnection agreement with Southwestern Bell Telephone, L.P. d/b/a AT&T, which succeeds a prior interconnection agreement. The OCC approved this agreement in May 2007. This agreement may be affected by regulatory proceedings at the federal and state levels, with possible adverse impacts on the Company. The Company is unable to accurately predict the outcomes of such regulatory proceedings at this time, but an unfavorable outcome could have a material adverse effect on the Company’s business, financial condition or results of operations. |
NOTE E - INCOME TAXES
NOTE E - INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
NOTE E - INCOME TAXES | NOTE E — INCOME TAXES The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. The Company has historically incurred losses from operations and therefore had no tax liability. The net deferred asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $2,999,590 and $2,989,210 for 2017 and 2016, respectively and will begin expiring in 2023. Deferred tax assets consist of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability. Deferred tax assets consist of the following: December 31, 2017 December 31, 2016 Net operating loss carry-forwards $ 629,914 $ 990,613 Valuation allowance (629,914) (990,613) $ - $ - The Tax Cuts and Jobs Act ("TCJA") was signed by the President of the United States and enacted into law on December 22, 2017. The TCJA significantly changes U.S. tax law by reducing the U.S. corporate income tax rate to 21.0% from 35.0%, adopting a territorial tax regime, creating new taxes on certain foreign sourced earnings and imposing a one-time transition tax on the undistributed earnings of certain non-U.S. subsidiaries. The net change during the year in the total valuation allowance was a decrease of $360,699 primarily related to the revaluation of deferred tax assets and liabilities at the reduced corporate rate of 21.0%. The reduction of net deferred tax assets due to the rate revaluation also decreased the amount of the valuation allowance by the same amount resulting in no overall net impact to the Company's income tax provision. |
NOTE F - COMMON STOCK AND STOCK
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION | Schedule of Employee Stock Option Activity Options Weighted average exercise price Weighted average remaining contractual life (yrs) Aggregate intrinsicvalue Options outstanding, December 31, 2015 3,244,882 $ 0.028 7.40 Options exercisable, December 31, 2015 2,477,215 $ 0.026 7.26 $ 9,089 Options granted during the year 48,000 0.030 Options exercised during the year (2,752,848) 0.003 Options forfeited during the year (21,000) 0.031 Options expired during the year (4,100) 0.026 Options outstanding, December 31, 2016 514,934 $ 0.005 6.26 Options exercisable, December 31, 2016 425,934 $ 0.003 5.78 $ 9,350 Options granted during the year 1,626,000 0.007 Options forfeited during the year (23,000) 0.007 Options expired during the year (7,100) 0.003 Options outstanding, December 31, 2017 2,110,834 $ 0.006 8.18 Options exercisable, December 31, 2017 626,834 $ 0.003 6.03 $ 22,902 The following table summarizes the Company’s non-vested employee stock option activity for years ended December 31, 2017 and 2016: 2017 2016 Non-vested options outstanding, beginning of year 89,000 727,666 Options granted during the year 1,626,000 48,000 Options vested during the year (208,000) (665,666) Options forfeited during the year (23,000) (21,000) Non-vested options outstanding, end of year 1,484,000 89,000 The fair values of the granted options are estimated at the date of grant using the Black-Scholes option pricing model. In addition to the exercise and grant date prices of the options, certain weighted average assumptions that were used to estimate the fair value of stock option grants in the respective periods are listed in the table below: 2017 2016 Risk free interest rate 1.80%–2.23 % 1.25%-1.29% Expected lives (in years) 5 5 Expected volatility 173%-267% 200%-204% Dividend yield 0% 0% The following table shows total stock options compensation expense included in the Consolidated Statements of Operations and the effect on basic and diluted earnings per share for the years ended December 31: 2017 2016 Stock options compensation $ 12,659 $ 53,309 Impact on income per share: Basic and diluted $ - $ - During the year 2017, 1,626,000 employee stock options were granted, of which 1,476,000 will vest one-third on each annual anniversary of the grant date resulting in $5,167 of stock options compensation. Stock options compensation of $1,496 recorded in the year 2017 was related to options that were granted in prior years. Stock options compensation of $5,996 recorded in the year 2017 was related to options on which the vesting requirement was waived for a retiring employee. The Company performed an analysis on the waived vesting under ASC 718-20 “stock compensation” and recorded this incremental expense. During the year 2017, 20,000 employee stock options were granted and forfeited in the same year. Additionally, 3,000 employee stock options were forfeited that were related to options granted in prior years. At December 31, 2017 there was $13,512 of unrecognized stock options compensation that is expected to be recognized as an expense over a weighted-average period of 4.9 years. Also during the year 2017, no employee stock options were exercised, and 7,100 employee stock options expired. During the year 2016, 33,000 employee stock options were granted which will vest one-third on each annual anniversary of the grant date resulting in $157 of stock options compensation. Stock options compensation of $2,067 recorded in the year 2016 was related to options that were granted in prior years. During the year 2016, 15,000 employee stock options were granted and forfeited in the same year. Additionally, 6,000 employee stock options were forfeited that related to options granted in prior years. At December 31, 2016 there was $2,178 of unrecognized stock options compensation that is expected to be recognized as an expense over a weighted-average period of 3.4 years. During the year 2016, the exercise price of 2,968,782 employee stock options with exercise prices ranging from $.01 to $.065 was reduced to $.003. The Company performed an analysis under ASC 718-20 “stock compensation” and recorded an incremental expense of $51,085. Also during the year 2016, 2,752,848 and 4,100 of employee stock options were exercised and expired, respectively. Common Stock Purchase Warrants Outstanding common stock purchase warrants issued to non-employees outstanding at December 31, 2017 are as follows: Number of shares Exercise price Expiration year 250,000 $ 0.003 2023 The following table summarizes the Company’s common stock purchase warrant activity for the years ended December 31: 2017 Weighted Average Exercise Price 2016 Weighted Average Exercise Price Warrants outstanding, beginning of year 250,000 $ 0.003 250,000 $ 0.003 Warrants expired during the year - - - - Warrants outstanding, end of year 250,000 $ 0.003 250,000 $ 0.003 The 250,000 warrants outstanding at December 31, 2017 were issued as equity compensation for consulting services. No warrants were granted during the years ended December 31, 2017 and 2016. |
NOTE G - SERIES A CONVERTIBLE P
NOTE G - SERIES A CONVERTIBLE PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
NOTE G - SERIES A CONVERTIBLE PREFERRED STOCK | NOTE G — SERIES A CONVERTIBLE PREFERRED STOCK On March 9, 2018, the Company’s board of directors made the determination that it was in the best interest of the Company and its stockholders to conserve the Company’s working capital at this time and not make the annual dividend payment for the year ending December 31, 2016, on its Series A convertible preferred stock. The Company has never made an annual dividend payment on its Series A convertible preferred stock. The holders of shares of the Series A convertible preferred stock are entitled to receive, when and as declared by the Company’s board of directors, dividends in cash in the amount of one cent per share per annum through December 31, 2016, five cents per share per annum through December 31, 2017, six cents per share per annum through December 31, 2018, seven cents per share per annum through December 31, 2019, eight cents per share per annum through December 31, 2020, nine cents per share per annum through December 31, 2021, ten cents per share per annum through December 31, 2022, eleven cents per share per annum through December 31, 2023, and twelve cents per share per annum thereafter, payable within 90 days following the 31st day of December each year on such date as determined by the board of directors. The dividends are cumulative and beginning January 1, 2017, the board of directors of the Company may elect to make any required dividend payment with the Company’s unregistered common stock in lieu of cash. Due to the unstated dividend cost arising from the gradually increasing dividends on the Series A convertible preferred stock, the Company calculated a discount on the Series A convertible preferred stock at the time of issuance as the present value of the difference between (i) the dividends that are payable in the periods preceding commencement of the perpetual twelve cents per share per annum dividend; and (ii) the perpetual twelve cents per share per annum dividend for a corresponding number of periods; discounted at a market rate of 12% totaling $309,337. The Series A convertible preferred stock was valued at the market price on the respective date of issuance for a total value of $672,472. The discount will be amortized over the periods preceding commencement of the perpetual dividend, by charging imputed dividend cost against retained earnings and increasing the carrying amount of the Series A convertible preferred stock by a corresponding amount. The discount amortization for the years ended December 31, 2017 and 2016 was $26,899 and $47,073, respectively. The discount amortization per share for the years 2017 and 2016 was $0.03 and $0.05, respectively. As of December 31, 2017, the aggregate outstanding accumulated arrearages of cumulative dividend was $88,839 or if issued in common shares, 2,220,980 shares. The Series A convertible preferred stock was originally issued as non-voting and provided that in the event that the Company failed, for any reason, to make a dividend payment as set forth above, then each share of the Series A convertible preferred stock shall thereafter be entitled to two votes upon any matter that the holders of the common stock of the Company are entitled to vote upon. On March 31, 2014, the Company’s board of directors made the determination that it was in the best interest of the Company and its stockholders to conserve the Company’s working capital at that time and not make the annual dividend payment for the year ending December 31, 2013. As a result each share of the Series A convertible preferred stock became thereafter entitled to two votes upon any matter that the holders of the common stock of the Company are entitled to vote upon. The Series A convertible preferred stock may be redeemed at the option of the Company’s board of directors for one dollar per share plus all accrued and unpaid dividends thereon at the date of redemption. In addition, at any time after a change of control of the Company, the holders of the Series A convertible preferred stock shall have the right, at the election of a majority of the holders, to require the Company to redeem all of the Series A convertible preferred stock for one dollar per share plus all accrued and unpaid dividends thereon at the date of redemption. The Series A convertible preferred stock has a liquidation preference of one dollar per share plus all accrued and unpaid dividends thereon in the event of liquidation, dissolution or winding up of the Company. The Company analyzed the embedded conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the conversion option should be classified as equity. The Company analyzed the conversion option for beneficial conversion features consideration under ASC 470-20 “Convertible Securities with Beneficial Conversion Features” and noted none. |
NOTE H - PROPERTY AND EQUIPMENT
NOTE H - PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
NOTE H - PROPERTY AND EQUIPMENT | NOTE H – PROPERTY AND EQUIPMENT During the years ended December 31, 2017 and 2016, $1,470 and $6,596 was paid for property and equipment, respectively. Depreciation expense from continuing operations for the years ended December 31, 2017 and 2016 was $8,732 and $15,682, respectively. |
NOTE I - DISCONTINUED OPERATION
NOTE I - DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
NOTE I - DISCONTINUED OPERATIONS | NOTE I – DISCONTINUED OPERATIONS In response to the changes in the telecommunications market and deterioration in the Company’s ability to effectively compete, the Company made the decision to exit the CLEC business. On October 27, 2017, the Company’s board of directors adopted a plan to exit the CLEC business as soon as possible through the sale of its wholly owned CLEC subsidiary and/or substantially all of its CLEC subsidiary’s operating assets. The Company was in negotiations with a potential buyer at December 31, 2017, which buyer subsequently purchased substantially all of its CLEC subsidiary’s operating assets pursuant to an asset purchase agreement which was executed and closed on February 1, 2018, (the “Sale”). The Company determined that the Sale represented a strategic shift that will have a major effect on the Company’s operations and financial results since it represented a complete exit from the CLEC business and, therefore, classified it’s CLEC subsidiary as held for sale at December 31, 2017. Assets and Liabilities of Discontinued Operations December 31, 2017 December 31, 2016 Carrying amounts of assets included in discontinued operations Cash $ 1,801 $ 1,006 Prepaid expenses and other current assets 2,671 1,520 Property and equipment, net 24,871 30,444 Total Assets of Discontinued Operations $ 29,343 $ 32,970 Carrying amounts of liabilities included in discontinued operations Accounts payable $ 57,342 $ 55,538 Accrued and other liabilities 19,878 18,681 Convertible notes payable, related party – current portion 116,592 28,374 Convertible notes payable, related party – less current portion - 116,592 Total Liabilities of Discontinued Operations $ 193,812 $ 219,185 Operating Results of Discontinued Operations December 31, 2017 December 31, 2016 Revenues included in discontinued operations Total colocation and other revenues $ 155,614 $ 168,825 Operating costs and expenses included in discontinued operations Cost of services $ 221,653 $ 190,557 Selling, general and administrative expenses 15,981 19,946 Depreciation and amortization 10,353 10,148 Interest expense 11,186 12,774 Net Loss from Discontinued Operations $ (103,559) $ (64,600) Net Loss per share from discontinued operations basic and diluted $ (0.01) $ (0.01) Cash Flows from Discontinued Operations December 31, 2017 December 31, 2016 Net cash used in operating activities (92,151) (98,174) Net cash used in investing activities (4,780) - Net cash used in financing activities (28,374) (26,833) Net cash used in discontinued operations (125,305) (125,007) |
NOTE J - SUBSEQUENT EVENTS
NOTE J - SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
NOTE J - SUBSEQUENT EVENTS | NOTE J – SUBSEQUENT EVENTS The Company sold substantially all of its CLEC subsidiary’s operating assets pursuant to an asset purchase agreement which was executed and closed on February 1, 2018, for $246,500. The Company used $113,342 of the proceeds to repay in full the secured convertible promissory note from a shareholder secured by all of the tangible and intangible assets of the Company. In February 2018, the Company granted 2,010,000 employee stock options to four employees with an exercise price of $.04. 1,750,000 of the stock options are exercisable immediately and shall not be subject to a vesting period. The remaining 260,000 stock options will vest one-fifth each year starting from February 14, 2019 and shall expire on February 14, 2028. |
NOTE A - SUMMARY OF ACCOUNTIN17
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Nature of Operations (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Nature of Operations | Nature of Operations FullNet Communications, Inc. and Subsidiaries (the Company) is an integrated communications provider offering Internet access, web hosting, equipment colocation, customized live help desk outsourcing services, group text and voice message delivery services, traditional telephone services as well as advanced voice and data solutions to individuals, businesses, organizations, educational institutions and governmental agencies. Through its subsidiaries, FullNet, Inc., FullTel, Inc., FullWeb, Inc. and CallMultiplier, Inc., the Company provides high quality, reliable and scalable Internet based solutions designed to meet customer needs. Services offered include: Dial-up and direct high-speed connectivity to the Internet through the FullNet brand name; Backbone services to private label Internet services providers (ISPs) and businesses; Carrier-neutral telecommunications premise colocation; Web page hosting; Equipment colocation; Customized live help desk outsourcing services; Group text and voice message delivery services; Advanced voice and data solutions; and Traditional telephone services. |
NOTE A - SUMMARY OF ACCOUNTIN18
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Consolidation (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Consolidation | Consolidation The consolidated financial statements include the accounts of FullNet Communications, Inc. and its wholly owned subsidiaries FullNet, Inc., FullTel, Inc., FullWeb, Inc., and CallMultiplier, Inc.. All material inter-company accounts and transactions have been eliminated. |
NOTE A - SUMMARY OF ACCOUNTIN19
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Use of Estimates (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures; accordingly, actual results could differ from those estimates. |
NOTE A - SUMMARY OF ACCOUNTIN20
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Cash Equivalents (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Cash Equivalents | Cash Equivalents Cash equivalents are represented by operating accounts or money market accounts maintained with insured financial institutions which consist of highly liquid investments that mature in three months or less from date of purchase. |
NOTE A - SUMMARY OF ACCOUNTIN21
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Accounts Receivable (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Accounts Receivable | Accounts Receivable The Company operates and grants credit, on an uncollateralized basis. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers comprising the Company’s customer base and their dispersion across different industries as well as the Company’s emphasis on obtaining deposits and/or payment in advance for services from the majority of its customers. During the year ended December 31, 2017 the Company had two customers that each comprised approximately 8% of total revenues. During the year ended December 31, 2016 the Company had two customers that comprised approximately 8% and 7% of total revenues, respectively. Due to consolidations resulting from a merger, the customer that comprised approximately 7% of total revenues in 2016, ended their relationship with the Company during the first quarter of 2017. Accounts receivable, other than certain large customer accounts which are evaluated individually, are considered past due for purposes of determining the allowance for doubtful accounts based on past experience of collectability as follows: 1 – 29 days 1.5 % 30 – 59 days 30 % 60 – 89 days 50 % > 90 days 100 % In addition, if the Company becomes aware of a specific customer’s inability to meet its financial obligations, a specific reserve is recoded against amounts due to reduce the net recognized receivable to the amount reasonably expected to be collected. Total bad debt expense and direct write-off for the years ended December 31, 2017 and 2016 was $480 and $700, respectively. Accounts receivable consist of the following at December 31: Schedule of Accounts Receivable 2017 2016 Accounts receivable $ 231,866 $ 217,678 Less allowance for doubtful accounts (223,012) (211,064) $ 8,854 $ 6,614 |
NOTE A - SUMMARY OF ACCOUNTIN22
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Property and Equipment (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Property and Equipment | 2017 2016 Computers and equipment $ 1,488,246 $ 1,488,246 Leasehold improvements 1,034,842 1,033,372 Software 58,041 58,041 Furniture and fixtures 39,284 39,284 2,620,413 2,618,943 Less accumulated depreciation (2,580,965) (2,572,233) $ 39,448 $ 46,710 Depreciation expense from continuing operations for the years ended December 31, 2017 and 2016 was $8,732 and $15,682, respectively. Depreciation expense from discontinued operations for the years ended December 31,2017 and 2016 was $10,353 and $10,148, respectively (see Note I). |
NOTE A - SUMMARY OF ACCOUNTIN23
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Long-Lived Assets (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Long-Lived Assets | Long-Lived Assets All long-lived assets held and used by the Company, including intangible assets, are reviewed to determine whether any events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. In accordance with ASC 360-10-35 “Impairment or Disposal of Long-lived Assets”, the Company bases its evaluation on such impairment indicators as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, as well as other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of the asset may not be recoverable the Company determines whether impairment has occurred through the use of an undiscounted cash flows analysis of the asset. If impairment has occurred, the Company recognizes a loss for the difference between the carrying amount and the estimated value of the asset. No intangible assets were purchased in 2017. During the year ended December 31, 2016, $10,500 was paid for an intangible asset and $16,000 was purchased on account. The Company incurred impairment expense in 2017 or 2016. Amortization expense for the years ended December 31, 2017 and 2016 was $9,051 and $2,700, respectively. |
NOTE A - SUMMARY OF ACCOUNTIN24
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Revenue Recognition | Revenue Recognition Revenues are reported on a monthly basis as services are provided, price is fixed and determinable, persuasive evidence of an arrangement exists and collectability of the resulting receivable is reasonably assured. Revenue that is received in advance of the services provided is deferred until the services are provided by the Company. Revenue related to set up charges is also deferred and amortized over the life of the contract. Revenues are presented net of taxes and fees billed to customers and remitted to governmental authorities. |
NOTE A - SUMMARY OF ACCOUNTIN25
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Advertising (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Advertising | Advertising The Company expenses advertising production costs as they are incurred and advertising communication costs the first time the advertising takes place. Advertising expense for the years ended December 31, 2017 and 2016 was $247,947 and $159,310, respectively. |
NOTE A - SUMMARY OF ACCOUNTIN26
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Income Taxes (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Income Taxes | Income Taxes The Company accounts for income taxes utilizing the asset and liability method. Deferred income taxes are determined based on the differences between the financial reporting and tax bases of assets and liabilities, using enacted statutory tax rates in effect for the year in which the differences are expected to reverse. The effects of future changes in tax laws or rates are not included in the measurement. The Company recognizes the amount of taxes payable or refundable for the current year and recognizes deferred tax liabilities and assets for the expected future tax consequences of events and transactions that have been recognized in the Company’s financial statements or tax returns. The Company currently has substantial net operating loss carry forwards. The Company has recorded a 100% valuation allowance against net deferred tax assets due to uncertainty of their ultimate realization. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense and does not believe it has any material unrealized tax benefits at December 31, 2017. The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. |
NOTE A - SUMMARY OF ACCOUNTIN27
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Income (Loss) Per Share (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Income (Loss) Per Share | Income (Loss) Per Share Income (loss) per share – basic is calculated by dividing net income (loss) by the weighted average number of shares of stock outstanding during the year, including shares issuable without additional consideration. Income per share – assuming dilution is calculated by dividing net income by the weighted average number of shares outstanding during the year adjusted for the effect of dilutive potential shares calculated using the treasury stock method. Reconciliation of basic and diluted income (loss) per share (“EPS”) are as follows: December 31, 2017 December 31, 2016 Net income (loss): Income from continuing operations $ 76,772 $ 58,642 Loss from discontinued operations – See Note I (103,559) (64,600) Net loss (26,787) (5,958) Preferred stock dividends (26,899) (47,073) Net loss available to common shareholders (53,686) (53,031) Basic income (loss) per share: Weighted-average common shares outstanding used in income (loss) per share computations 11,871,009 9,298,676 Basic income (loss) per share: Continuing operations 0.01 0.01 Discontinued operations – See Note I (0.01) (0.01) Basic income (loss) per share (0.00) (0.01) Diluted income (loss) per share: Shares used in diluted income (loss) per share computations 14,865,058 10,929,224 Diluted income (loss) per share Continuing operations 0.01 0.01 Discontinued operations – See Note I (0.01) (0.01) Diluted income (loss) per share (0.00) (0.01) Computation of shares used in income (loss) per share: Weighted average shares and share equivalents outstanding 11,871,009 9,298,676 Effect of preferred stock 987,102 987,102 Effect of dilutive stock options 1,775,872 423,384 Effect of dilutive warrants 231,075 220,062 Weighted average shares and share equivalents outstanding – assuming dilution 14,865,058 10,929,224 Schedule of Anti-dilutive Securities Excluded : December 31, 2017 December 31, 2016 Stock options 3,000 33,000 Convertible promissory notes 183,252 214,835 Total anti-dilutive securities excluded 186,252 247,835 Anti-dilutive securities consist of stock options and convertible promissory notes whose exercise price or conversion price, respectively, was greater than the average market price of the common stock. |
NOTE A - SUMMARY OF ACCOUNTIN28
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Stock-Based Compensation (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Stock-Based Compensation | Stock-Based Compensation The Company does not have a written employee stock option plan. The Company has historically granted only employee stock options with an exercise price equal to the market price of the Company’s stock at the date of grant, a contractual term of ten years, and a vesting period of three years ratably on the first, second and third anniversaries of the date of grant (with limited exceptions). All employee stock options granted during 2017 and 2016 were nonqualified stock options. Stock-based compensation is measured at the grant date, based on the calculated fair value of the option, and is recognized as an expense on a straight-line basis over the requisite employee service period (generally the vesting period of the grant). The fair values of the granted options are estimated at the date of grant using the Black-Scholes option pricing model. See Note F – Common Stock and Stock-Based Compensation for further information on stock-based compensation. |
NOTE A - SUMMARY OF ACCOUNTIN29
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Beneficial Conversion Features (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Beneficial Conversion Features | Beneficial Conversion Features The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon conversion, is treated as a discount to the convertible note payable. This discount is amortized over the period from the date of issuance to the date the note is due using the effective interest method. If the note payable is retired prior to the end of its contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the common shares at the commitment date to be received upon conversion. |
NOTE A - SUMMARY OF ACCOUNTIN30
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Related Parties (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Related Parties | Related Parties 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. The Company has two secured convertible promissory notes from a shareholder. The note balances at December 31, 2017 were $116,592 and $33,242. The note balances at December 31, 2016 were $144,966 and $38,286 (see Note C – Convertible Notes Payable Related Party). Additionally, the Company had related party accounts payable to officers and directors for unpaid expense reimbursements in the amounts of $7,982 and $13,935 for years ending December 31, 2017 and 2016, respectively. |
NOTE A - SUMMARY OF ACCOUNTIN31
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Fair Value Measurements (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Fair Value Measurements | Fair Value Measurements The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 820, “Fair Value Measurements and Disclosures”. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. |
NOTE A - SUMMARY OF ACCOUNTIN32
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09, along with the related updates (“ASC 606”), will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. ASC 606 provides a unified model to determine how revenue is recognized. This new standard provides a five-step framework whereby revenue is recognized when promised goods or services are transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Two adoption methods are permitted: retrospectively to all prior reporting periods presented, with certain practical expedients permitted; or retrospectively with the cumulative effect of initially adopting the ASU recognized at the date of initial application. We adopted ASC 606 on its effective date, January 1, 2018, using the modified retrospective approach and do not expect the adoption of ASC 606 to have a material effect on our consolidated financial statements or disclosures. In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the least term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations cash flows or financial condition. |
NOTE B - GOING CONCERN_ Basis o
NOTE B - GOING CONCERN: Basis of Accounting (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Basis of Accounting | accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. |
NOTE A - SUMMARY OF ACCOUNTIN34
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Accounts Receivable: Schedule of Past Due Accounts (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Past Due Accounts | 1 – 29 days 1.5 % 30 – 59 days 30 % 60 – 89 days 50 % > 90 days 100 % |
NOTE A - SUMMARY OF ACCOUNTIN35
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Accounts Receivable: Schedule of Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Accounts Receivable | Schedule of Accounts Receivable 2017 2016 Accounts receivable $ 231,866 $ 217,678 Less allowance for doubtful accounts (223,012) (211,064) $ 8,854 $ 6,614 |
NOTE A - SUMMARY OF ACCOUNTIN36
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Property and Equipment: Schedule of estimated useful lives of property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of estimated useful lives of property and equipment | Software 3 years Computers and equipment 5 years Furniture and fixtures 7 years Leasehold improvements Shorter of estimated life of improvement or the lease term |
NOTE A - SUMMARY OF ACCOUNTIN37
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Property and Equipment: Schedule of Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Property, Plant and Equipment | 2017 2016 Computers and equipment $ 1,488,246 $ 1,488,246 Leasehold improvements 1,034,842 1,033,372 Software 58,041 58,041 Furniture and fixtures 39,284 39,284 2,620,413 2,618,943 Less accumulated depreciation (2,580,965) (2,572,233) $ 39,448 $ 46,710 |
NOTE A - SUMMARY OF ACCOUNTIN38
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Income (Loss) Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Earnings Per Share, Basic and Diluted | December 31, 2017 December 31, 2016 Net income (loss): Income from continuing operations $ 76,772 $ 58,642 Loss from discontinued operations – See Note I (103,559) (64,600) Net loss (26,787) (5,958) Preferred stock dividends (26,899) (47,073) Net loss available to common shareholders (53,686) (53,031) Basic income (loss) per share: Weighted-average common shares outstanding used in income (loss) per share computations 11,871,009 9,298,676 Basic income (loss) per share: Continuing operations 0.01 0.01 Discontinued operations – See Note I (0.01) (0.01) Basic income (loss) per share (0.00) (0.01) Diluted income (loss) per share: Shares used in diluted income (loss) per share computations 14,865,058 10,929,224 Diluted income (loss) per share Continuing operations 0.01 0.01 Discontinued operations – See Note I (0.01) (0.01) Diluted income (loss) per share (0.00) (0.01) Computation of shares used in income (loss) per share: Weighted average shares and share equivalents outstanding 11,871,009 9,298,676 Effect of preferred stock 987,102 987,102 Effect of dilutive stock options 1,775,872 423,384 Effect of dilutive warrants 231,075 220,062 Weighted average shares and share equivalents outstanding – assuming dilution 14,865,058 10,929,224 |
NOTE A - SUMMARY OF ACCOUNTIN39
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Income (Loss) Per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Schedule of Anti-dilutive Securities Excluded : December 31, 2017 December 31, 2016 Stock options 3,000 33,000 Convertible promissory notes 183,252 214,835 Total anti-dilutive securities excluded 186,252 247,835 |
NOTE C - CONVERTIBLE NOTES PA40
NOTE C - CONVERTIBLE NOTES PAYABLE RELATED PARTY: Schedule of Notes Payable Related Party (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Notes Payable Related Party | Schedule of Notes Payable Related Party December 31, 2017 December 31, 2016 Secured convertible promissory note from a shareholder; interest rate of 6% through December 31, 2014, 7% through December 31, 2015, 8% through December 31, 2016, 8.5% through December 31, 2017, and 9% through May 31, 2018, with fixed monthly payments of $3,301 through the Maturity Date, at which time the remaining balance of principal and all accrued interest shall be due and payable; matures May 31, 2018; secured by all tangible and intangible assets of the Company (1) $ 116,592 $ 144,966 Secured convertible promissory note from a shareholder; interest at 6%, requires monthly installments of interest only through May 31, 2014, then requires monthly installments of $600 including principal and interest; matures May 31, 2023; secured by certain equipment of the Company (2) 33,242 38,286 149,834 183,252 Less current portion – continuing operations 5,354 5,044 Less current portion – discontinued operations 116,592 28,374 Convertible notes payable, related party – continuing operations, less current portion $ 27,888 $ 33,242 Convertible notes payable, related party – discontinued operations, less current portion $ - $ 116,592 |
NOTE C - CONVERTIBLE NOTES PA41
NOTE C - CONVERTIBLE NOTES PAYABLE RELATED PARTY: Schedule of Maturities of Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Maturities of Long-term Debt | 2018 $ 121,123 2019 5,685 2020 6,036 2021 6,408 2022 6,803 Thereafter 2,956 $ 149,011 |
NOTE D - COMMITMENTS AND CONT42
NOTE D - COMMITMENTS AND CONTINGENCIES: Contractual Obligation, Future Minimum Payments Under Operating Lease (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Contractual Obligation, Future Minimum Payments Under Operating Lease | Year ending December 31 2018 221,782 2019 221,782 $ 443,564 |
NOTE E - INCOME TAXES_ Schedule
NOTE E - INCOME TAXES: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | December 31, 2017 December 31, 2016 Net operating loss carry-forwards $ 629,914 $ 990,613 Valuation allowance (629,914) (990,613) $ - $ - |
NOTE F - COMMON STOCK AND STO44
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION: Schedule of Employee Stock Option Activity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Employee Stock Option Activity | Schedule of Employee Stock Option Activity Options Weighted average exercise price Weighted average remaining contractual life (yrs) Aggregate intrinsicvalue Options outstanding, December 31, 2015 3,244,882 $ 0.028 7.40 Options exercisable, December 31, 2015 2,477,215 $ 0.026 7.26 $ 9,089 Options granted during the year 48,000 0.030 Options exercised during the year (2,752,848) 0.003 Options forfeited during the year (21,000) 0.031 Options expired during the year (4,100) 0.026 Options outstanding, December 31, 2016 514,934 $ 0.005 6.26 Options exercisable, December 31, 2016 425,934 $ 0.003 5.78 $ 9,350 Options granted during the year 1,626,000 0.007 Options forfeited during the year (23,000) 0.007 Options expired during the year (7,100) 0.003 Options outstanding, December 31, 2017 2,110,834 $ 0.006 8.18 Options exercisable, December 31, 2017 626,834 $ 0.003 6.03 $ 22,902 |
NOTE F - COMMON STOCK AND STO45
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION: Schedule of Nonvested Share Activity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Nonvested Share Activity | 2017 2016 Non-vested options outstanding, beginning of year 89,000 727,666 Options granted during the year 1,626,000 48,000 Options vested during the year (208,000) (665,666) Options forfeited during the year (23,000) (21,000) Non-vested options outstanding, end of year 1,484,000 89,000 |
NOTE F - COMMON STOCK AND STO46
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 2017 2016 Risk free interest rate 1.80%–2.23 % 1.25%-1.29% Expected lives (in years) 5 5 Expected volatility 173%-267% 200%-204% Dividend yield 0% 0% |
NOTE F - COMMON STOCK AND STO47
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION: Schedule of Stock Options Compensation Expense (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Stock Options Compensation Expense | 2017 2016 Stock options compensation $ 12,659 $ 53,309 Impact on income per share: Basic and diluted $ - $ - |
NOTE F - COMMON STOCK AND STO48
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION: Schedule of Outstanding common stock purchase warrants issued to non-employees (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Outstanding common stock purchase warrants issued to non-employees | Number of shares Exercise price Expiration year 250,000 $ 0.003 2023 |
NOTE F - COMMON STOCK AND STO49
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION: Schedule of common stock purchase warrant activity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of common stock purchase warrant activity | 2017 Weighted Average Exercise Price 2016 Weighted Average Exercise Price Warrants outstanding, beginning of year 250,000 $ 0.003 250,000 $ 0.003 Warrants expired during the year - - - - Warrants outstanding, end of year 250,000 $ 0.003 250,000 $ 0.003 |
NOTE I - DISCONTINUED OPERATI50
NOTE I - DISCONTINUED OPERATIONS: Assets and Liabilities of Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Assets and Liabilities of Discontinued Operations | Assets and Liabilities of Discontinued Operations December 31, 2017 December 31, 2016 Carrying amounts of assets included in discontinued operations Cash $ 1,801 $ 1,006 Prepaid expenses and other current assets 2,671 1,520 Property and equipment, net 24,871 30,444 Total Assets of Discontinued Operations $ 29,343 $ 32,970 Carrying amounts of liabilities included in discontinued operations Accounts payable $ 57,342 $ 55,538 Accrued and other liabilities 19,878 18,681 Convertible notes payable, related party – current portion 116,592 28,374 Convertible notes payable, related party – less current portion - 116,592 Total Liabilities of Discontinued Operations $ 193,812 $ 219,185 |
NOTE I - DISCONTINUED OPERATI51
NOTE I - DISCONTINUED OPERATIONS: Operating Results of Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Operating Results of Discontinued Operations | Operating Results of Discontinued Operations December 31, 2017 December 31, 2016 Revenues included in discontinued operations Total colocation and other revenues $ 155,614 $ 168,825 Operating costs and expenses included in discontinued operations Cost of services $ 221,653 $ 190,557 Selling, general and administrative expenses 15,981 19,946 Depreciation and amortization 10,353 10,148 Interest expense 11,186 12,774 Net Loss from Discontinued Operations $ (103,559) $ (64,600) Net Loss per share from discontinued operations basic and diluted $ (0.01) $ (0.01) |
NOTE I - DISCONTINUED OPERATI52
NOTE I - DISCONTINUED OPERATIONS: Cash Flows from Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Cash Flows from Discontinued Operations | Cash Flows from Discontinued Operations December 31, 2017 December 31, 2016 Net cash used in operating activities (92,151) (98,174) Net cash used in investing activities (4,780) - Net cash used in financing activities (28,374) (26,833) Net cash used in discontinued operations (125,305) (125,007) |
NOTE A - SUMMARY OF ACCOUNTIN53
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Accounts Receivable: Schedule of Accounts Receivable (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Accounts Receivable, Gross, Current | $ 231,866 | $ 217,678 |
Allowance for Doubtful Accounts Receivable, Current | (223,012) | (211,064) |
Accounts receivable, net | $ 8,854 | $ 6,614 |
NOTE A - SUMMARY OF ACCOUNTIN54
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Details | |||
Property, Plant and Equipment, Depreciation Methods | straight-line method | ||
Depreciation | $ 8,732 | $ 15,682 | |
Depreciation and Amortization, Discontinued Operations | [1] | $ 10,353 | $ 10,148 |
[1] | See Note I. |
NOTE A - SUMMARY OF ACCOUNTIN55
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Property and Equipment: Schedule of estimated useful lives of property and equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Software and Software Development Costs | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer Equipment | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture and Fixtures | |
Property, Plant and Equipment, Useful Life | 7 years |
NOTE A - SUMMARY OF ACCOUNTIN56
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Property and Equipment: Schedule of Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Machinery and Equipment, Gross | $ 1,488,246 | $ 1,488,246 |
Leasehold Improvements, Gross | 1,034,842 | 1,033,372 |
Capitalized Computer Software, Gross | 58,041 | 58,041 |
Furniture and Fixtures, Gross | 39,284 | 39,284 |
Property, Plant and Equipment, Gross | 2,620,413 | 2,618,943 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (2,580,965) | (2,572,233) |
PROPERTY AND EQUIPMENT, net | $ 39,448 | $ 46,710 |
NOTE A - SUMMARY OF ACCOUNTIN57
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Long-Lived Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Goodwill, Impairment Loss | $ 0 | $ 0 |
Amortization | $ 9,051 | $ 2,700 |
NOTE A - SUMMARY OF ACCOUNTIN58
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Advertising (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Advertising Expense | $ 247,947 | $ 159,310 |
NOTE A - SUMMARY OF ACCOUNTIN59
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Income (Loss) Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Net income (loss): | |||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | $ 76,772 | $ 58,642 | |
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | [1] | (103,559) | (64,600) |
Net Income (Loss) Attributable to Parent | (26,787) | (5,958) | |
Preferred stock dividends | (26,899) | (47,073) | |
Net loss available to common stockholders | $ (53,686) | $ (53,031) | |
Earnings Per Share | |||
Weighted Average Number of Shares Outstanding, Basic | 11,871,009 | 9,298,676 | |
Basic, Continuing operations | $ 0.01 | $ 0.01 | |
Basic, Discontinued operations - See Note I | [2] | (0.01) | (0.01) |
Basic income (loss) per share | $ 0 | $ (0.01) | |
Weighted Average Number of Shares Outstanding, Diluted | 14,865,058 | 10,929,224 | |
Diluted, Continuing operations | $ 0.01 | $ 0.01 | |
Diluted, Discontinued operations - See Note I | [2] | (0.01) | (0.01) |
Diluted income (loss) per share | $ 0 | $ (0.01) | |
Computation of shares used in income (loss) per share: | |||
Weighted average shares and share equivalents outstanding | 11,871,009 | 9,298,676 | |
Effect of preferred stock | 987,102 | 987,102 | |
Effect of dilutive stock options | 1,775,872 | 423,384 | |
Effect of dilutive warrants | 231,075 | 220,062 | |
Weighted average shares and share equivalents outstanding - assuming dilution | 14,865,058 | 10,929,224 | |
[1] | See Note I. | ||
[2] | The note holder has the right to convert the note, in its entirety or in part, into common stock of the Company at the rate of $1.00 per share. During the years 2017 and 2016, the Company made principal payments totaling $28,374 and $26,833, respectively. The secured convertible promissory note had a balance of $116,592 at December 31, 2017 which is all short-term. The Company analyzed the conversion option for derivative accounting and beneficial conversion features consideration under ASC 815-15 “Derivatives and Hedging” and ASC 470-20 “Convertible Securities with Beneficial Conversion Features” and noted none. |
NOTE A - SUMMARY OF ACCOUNTIN60
NOTE A - SUMMARY OF ACCOUNTING POLICIES AND NATURE OF OPERATIONS: Income (Loss) Per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Compensation Plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,000 | 33,000 |
Convertible Debt Securities | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 183,252 | 214,835 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 186,252 | 247,835 |
NOTE B - GOING CONCERN (Details
NOTE B - GOING CONCERN (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Substantial Doubt about Going Concern, Conditions or Events | At December 31, 2017 and 2016, current liabilities exceeded current assets by $1,014,385 and $989,467, respectively. | |
Working Capital Deficit | $ 1,014,385 | $ 989,467 |
Substantial Doubt about Going Concern, Management's Plans, Substantial Doubt Not Alleviated | The Company’s business plan includes, among other things, expansion through mergers and acquisitions and the development of its colocation and advanced voice and data solutions. Execution of the Company’s business plan will require significant capital to fund capital expenditures, working capital needs and debt service. Current cash balances will not be sufficient to fund the Company’s current business plan beyond the next few months. |
NOTE C - CONVERTIBLE NOTES PA62
NOTE C - CONVERTIBLE NOTES PAYABLE RELATED PARTY: Schedule of Notes Payable Related Party (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Related Party Transaction, Due from (to) Related Party | $ 149,834 | $ 183,252 | |
Less current portion - continuing operations | 5,354 | 5,044 | |
Less current portion - discontinued operations | 116,592 | 28,374 | |
Convertible notes payable, related party - continuing operations, less current portion | 27,888 | 33,242 | |
Convertible notes payable, related party - discontinued operations, less current portion | $ 0 | 116,592 | |
Related Party Note 1 | |||
Related Party Transaction, Description of Transaction | [1] | Secured convertible promissory note from a shareholder | |
Debt Instrument, Maturity Date | [1] | May 31, 2018 | |
Debt Instrument, Collateral | [1] | secured by all tangible and intangible assets of the Company | |
Related Party Transaction, Due from (to) Related Party | [1] | $ 116,592 | 144,966 |
Related Party Note 1 | Through December 31, 2014 | |||
Related Party Transaction, Rate | [1] | 6.00% | |
Related Party Note 1 | Through December 31, 2015 | |||
Related Party Transaction, Rate | [1] | 7.00% | |
Related Party Note 1 | Through December 31, 2016 | |||
Related Party Transaction, Rate | [1] | 8.00% | |
Related Party Note 1 | Through December 31, 2017 | |||
Related Party Transaction, Rate | [1] | 8.50% | |
Related Party Note 1 | Through May 31, 2018 | |||
Related Party Transaction, Rate | [1] | 9.00% | |
Related Party Note 2 | |||
Related Party Transaction, Description of Transaction | [2] | Secured convertible promissory note from a shareholder | |
Related Party Transaction, Rate | [2] | 6.00% | |
Debt Instrument, Maturity Date | [2] | May 31, 2023 | |
Debt Instrument, Collateral | [2] | secured by certain equipment of the Company | |
Related Party Transaction, Due from (to) Related Party | [2] | $ 33,242 | $ 38,286 |
Related Party Transaction, Terms and Manner of Settlement | [2] | requires monthly installments of interest only through May 31, 2014, then requires monthly installments of $600 including principal and interest | |
[1] | The note holder has the right to convert the note, in its entirety or in part, into common stock of the Company at the rate of $1.00 per share. During the years 2017 and 2016, the Company made principal payments totaling $28,374 and $26,833, respectively. The secured convertible promissory note had a balance of $116,592 at December 31, 2017 which is all short-term. The Company analyzed the conversion option for derivative accounting and beneficial conversion features consideration under ASC 815-15 “Derivatives and Hedging” and ASC 470-20 “Convertible Securities with Beneficial Conversion Features” and noted none. | ||
[2] | The note holder has the right to convert the note, in its entirety or in part, into common stock of the Company at the rate of $1.00 per share. During the years 2017 and 2016, the Company made principal payments of $5,044 and $4,751, respectively. The secured convertible promissory note had a balance of $33,242 at December 31, 2017 of which $5,354 is short-term and $27,888 is long-term. This secured convertible promissory note is secured by certain equipment of the Company. Upon payment of the balance due on this secured convertible promissory note title of the equipment will be transferred to the Company free and clear of all liens and encumbrances. The Company analyzed the conversion option for derivative accounting and beneficial conversion features consideration under ASC 815-15 “Derivatives and Hedging” and ASC 470-20 “Convertible Securities with Beneficial Conversion Features” and noted none. |
NOTE C - CONVERTIBLE NOTES PA63
NOTE C - CONVERTIBLE NOTES PAYABLE RELATED PARTY (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Note 1 | ||
Related Party Notes, Principal Payment | $ 28,374 | $ 26,833 |
Related Party Notes, Balance | 116,592 | |
Related Party Note 2 | ||
Related Party Notes, Principal Payment | 5,044 | $ 4,751 |
Related Party Notes, Balance | 33,242 | |
Related Party Notes, Balance, Short-term | 5,354 | |
Related Party Notes, Balance, Long-term | $ 27,888 |
NOTE C - CONVERTIBLE NOTES PA64
NOTE C - CONVERTIBLE NOTES PAYABLE RELATED PARTY: Schedule of Maturities of Long-term Debt (Details) | Dec. 31, 2017USD ($) |
Details | |
Long-term Debt and Capital Lease Obligations, Repayments of Principal in Next Twelve Months | $ 121,123 |
Long-term Debt and Capital Lease Obligations, Maturities, Repayments of Principal in Year Two | 5,685 |
Long-term Debt and Capital Lease Obligations, Maturities, Repayments of Principal in Year Three | 6,036 |
Long-term Debt and Capital Lease Obligations, Maturities, Repayments of Principal in Year Four | 6,408 |
Long-term Debt and Capital Lease Obligations, Maturities, Repayments of Principal in Year Five | 6,803 |
Long-term Debt and Capital Lease Obligations, Maturities, Repayments of Principal after Year Five | 2,956 |
Long-term Debt and Capital Lease Obligations | $ 149,011 |
NOTE D - COMMITMENTS AND CONT65
NOTE D - COMMITMENTS AND CONTINGENCIES: Contractual Obligation, Future Minimum Payments Under Operating Lease (Details) | Dec. 31, 2017USD ($) |
Details | |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 221,782 |
Operating Leases, Future Minimum Payments, Due in Two Years | 221,782 |
Operating Leases, Future Minimum Payments Due | $ 443,564 |
NOTE D - COMMITMENTS AND CONT66
NOTE D - COMMITMENTS AND CONTINGENCIES: Commitments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Operating Leases, Rent Expense | $ 297,364 | $ 313,675 |
Description of Lessee Leasing Arrangements, Operating Leases | The Company’s long-term non-cancelable operating lease includes scheduled base rental increases over the term of the lease. The total amount of the base rental payments is charged to expense on the straight-line method over the term of the lease. | |
Deferred Rent Credit | $ 13,046 |
NOTE D - COMMITMENTS AND CONT67
NOTE D - COMMITMENTS AND CONTINGENCIES: Contingencies (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Details | |
Loss Contingency, Management's Assessment and Process | The Company is unable to accurately predict the outcomes of such regulatory proceedings at this time, but an unfavorable outcome could have a material adverse effect on the Company’s business, financial condition or results of operations. |
NOTE E - INCOME TAXES_ Schedu68
NOTE E - INCOME TAXES: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Operating Loss Carryforwards | $ 629,914 | $ 990,613 |
Operating Loss Carryforwards, Valuation Allowance | (629,914) | (990,613) |
Deferred Tax Assets, Net of Valuation Allowance | $ 0 | $ 0 |
NOTE F - COMMON STOCK AND STO69
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION: Schedule of Employee Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 514,934 | 3,244,882 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $ 0.005 | $ 0.028 |
Share-based Compensation, Options Outstanding, Weighted Averaged remaining Contractual Term | $ 6.26 | $ 7.40 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 425,934 | 2,477,215 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.003 | $ 0.026 |
Share-based Compensation, Exercisable Weighted Average Remaining Contractual Term | $ 5.78 | $ 7.26 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 9,350 | $ 9,089 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,626,000 | 48,000 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.007 | $ 0.030 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | (2,752,848) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 0.003 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (23,000) | (21,000) |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ (0.007) | $ 0.031 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | (7,100) | (4,100) |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price | $ 0.003 | $ 0.026 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | 2,110,834 | 514,934 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ 0.006 | $ 0.005 |
Share-based Compensation, Options Outstanding, Weighted Averaged remaining Contractual Term | $ 6.26 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 626,834 | 425,934 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.003 | $ 0.003 |
Share-based Compensation, Exercisable Weighted Average Remaining Contractual Term | $ 5.78 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 22,902 | $ 9,350 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ 0.007 | $ (0.031) |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 8 years 2 months 4 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 6 years 10 days |
NOTE F - COMMON STOCK AND STO70
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION: Schedule of Nonvested Share Activity (Details) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares, Beginning Balance | 89,000 | 727,666 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,626,000 | 48,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | (208,000) | (665,666) |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (23,000) | (21,000) |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares, Ending Balance | 1,484,000 | 89,000 |
NOTE F - COMMON STOCK AND STO71
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Expected lives (in years) | 5 years | 5 years |
Dividend yield | 0.00% | 0.00% |
Minimum | ||
Risk free interest rate | 1.80% | 1.25% |
Expected volatility | 173.00% | 200.00% |
Maximum | ||
Risk free interest rate | 2.23% | 1.29% |
Expected volatility | 267.00% | 204.00% |
NOTE F - COMMON STOCK AND STO72
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION: Schedule of Stock Options Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Allocated Share-based Compensation Expense | $ 12,659 | $ 53,309 |
Dilutive Securities, Effect on Basic Earnings Per Share, ESOP Convertible Preferred Stock | $ 0 | $ 0 |
NOTE F - COMMON STOCK AND STO73
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Warrants granted | $ 0 | $ 0 |
Vest one-third on each annual anniversary of the grant date | ||
Stock Options Compensation | $ 5,167 |
NOTE F - COMMON STOCK AND STO74
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION: Schedule of Outstanding common stock purchase warrants issued to non-employees (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Details | |
Common Stock purchase warrants issued to non-employees, outstanding | shares | 250,000 |
Common Stock purchase warrants issued to non-employees, exercise price | $ / shares | $ 0.003 |
Common Stock purchase warrants issued to non-employees, expiration year | 2,023 |
NOTE F - COMMON STOCK AND STO75
NOTE F - COMMON STOCK AND STOCK-BASED COMPENSATION: Schedule of common stock purchase warrant activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Details | |||
Warrants and Rights Outstanding | $ 250,000 | $ 250,000 | $ 250,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.003 | $ 0.003 | |
Warrants expired | $ 0 | $ 0 | |
Warrants expired, weighted average price | $ 0 | $ 0 |
NOTE G - SERIES A CONVERTIBLE76
NOTE G - SERIES A CONVERTIBLE PREFERRED STOCK (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Convertible Preferred Stock, Terms of Conversion | On March 9, 2018, the Company’s board of directors made the determination that it was in the best interest of the Company and its stockholders to conserve the Company’s working capital at this time and not make the annual dividend payment for the year ending December 31, 2016, on its Series A convertible preferred stock. The Company has never made an annual dividend payment on its Series A convertible preferred stock. | |
Preferred Stock, Dividend Payment Rate, Variable | one cent per share per annum through December 31, 2016, five cents per share per annum through December 31, 2017, six cents per share per annum through December 31, 2018, seven cents per share per annum through December 31, 2019, eight cents per share per annum through December 31, 2020, nine cents per share per annum through December 31, 2021, ten cents per share per annum through December 31, 2022, eleven cents per share per annum through December 31, 2023, and twelve cents per share per annum thereafter | |
Preferred Stock, Dividend Payment Terms | payable within 90 days following the 31st day of December each year on such date as determined by the board of directors. The dividends are cumulative and beginning January 1, 2017, the board of directors of the Company may elect to make any required dividend payment with the Company’s unregistered common stock in lieu of cash. | |
Series A Preferred Stock, Discount Amortization | $ 26,899 | $ 47,073 |
NOTE H - PROPERTY AND EQUIPME77
NOTE H - PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Payments to Acquire Property, Plant, and Equipment | $ 1,470 | $ 6,596 |
Depreciation | $ 8,732 | $ 15,682 |
NOTE I - DISCONTINUED OPERATI78
NOTE I - DISCONTINUED OPERATIONS: Assets and Liabilities of Discontinued Operations (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying amounts of assets included in discontinued operations | ||
Cash | $ 1,801 | $ 1,006 |
Prepaid expenses and other current assets | 2,671 | 1,520 |
Property and equipment, net | 24,871 | 30,444 |
Total Assets of Discontinued Operations | 29,343 | 32,970 |
Carrying amounts of liabilities included in discontinued operations | ||
Accounts payable | 57,342 | 55,538 |
Accrued and other liabilities | 19,878 | 18,681 |
Convertible notes payable, related party - current portion | 116,592 | 28,374 |
Convertible notes payable, related party - less current portion | 0 | 116,592 |
Total Liabilities of Discontinued Operations | $ 193,812 | $ 219,185 |
NOTE I - DISCONTINUED OPERATI79
NOTE I - DISCONTINUED OPERATIONS: Operating Results of Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues included in discontinued operations | ||
Total colocation and other revenues | $ 155,614 | $ 168,825 |
Operating costs and expenses included in discontinued operations | ||
Cost of services | 221,653 | 190,557 |
Selling, general and administrative expenses | 15,981 | 19,946 |
Depreciation and amortization | 10,353 | 10,148 |
Interest expense | 11,186 | 12,774 |
Net Loss from Discontinued Operations | $ (103,559) | $ (64,600) |
Net Loss per share from discontinued operations basic and diluted | $ (0.01) | $ (0.01) |
NOTE I - DISCONTINUED OPERATI80
NOTE I - DISCONTINUED OPERATIONS: Cash Flows from Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Net cash used in operating activities | $ (92,151) | $ (98,174) |
Net cash used in investing activities | (4,780) | 0 |
Net cash used in financing activities | (28,374) | (26,833) |
Net cash used in discontinued operations | $ (125,305) | $ (125,007) |
NOTE J - SUBSEQUENT EVENTS (Det
NOTE J - SUBSEQUENT EVENTS (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Event 1 | |
Subsequent Event, Description | Company sold substantially all of its CLEC subsidiary’s operating assets |
Event 2 | |
Subsequent Event, Description | Company granted 2,010,000 employee stock options to four employees |