| Summary of Significant Accounting Policies | Note 2: SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principals of Consolidation The accompanying unaudited financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities
and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by accounting
principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s
management, the accompanying unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring
accruals) to present the financial position of the Company as of March 31, 2019, and the results of operations and cash flows for
the periods presented. The results of operations for the three months ended March 31, 2019, are not necessarily indicative of the
operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read
in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2018, filed with the SEC on December 20, 2019. The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the financial statements
in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue
and expenses during the reporting periods. Actual results could differ from those estimates. Certain of the Company’s estimates
could be affected by external conditions, including those unique to its industry, and general economic conditions. It is possible
that these external conditions could have an effect on the Company’s estimates that could cause actual results to differ
from its estimates. The Company re-evaluates all its accounting estimates at least quarterly based on these conditions and record
adjustments when necessary. Significant estimates relied upon in preparing
these consolidated financial statements include revenue recognition, accounts receivable reserves, inventory and related reserves,
valuations and purchase price allocations related to business combinations, expected future cash flows used to evaluate the recoverability
of long-lived assets, estimated fair values of long-lived assets used to record impairment charges related to intangible assets
and goodwill, amortization periods, accrued expenses, share-based compensation, and recoverability of the Company’s net deferred
tax assets and any related valuation allowance. Financial Statement Reclassification Certain account balances from prior periods
have been reclassified in these unaudited consolidated financial statements to conform to current period classifications. Cash The Company considers all short-term highly
liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. Revenue Recognition In May 2014, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (ASU) No. 20 l4-09, Revenue from Contracts with Customers (Topic
606) Revenue from Contracts with Customers (Topic 606): Principal
versus Agent Considerations; Revenue from Contracts with Customers (Topic 606): Identifying Performance
Obligations and Licensing; Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements
and Practical Expedients; Technical Corrections and Improvements to Topic 606, Revenue from Contracts
with Customers. The new revenue standards became effective
for the Company on January 1, 2018, and were adopted using the modified retrospective method. The adoption of the new revenue standards
did not change the Company’s revenue recognition as the majority of its revenues continue to be recognized when the customer
takes control of its product. As the Company did not identify any accounting changes that impacted the amount of reported revenues
with respect to its product revenues, no adjustment to retained earnings was required upon adoption. Under the new revenue standards, the Company
recognizes revenues when its customer obtains control of promised goods or services, or when they are shipped to that customer,
in an amount that reflects the consideration which it expects to receive in exchange for them. The Company recognizes revenues
following the five-step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance
obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations
in the contract; and (v) recognize revenues when (or as) the Company satisfies its performance obligation. Revenues from product sales are recognized
when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon shipment or delivery
to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization
period of the asset that it would have recognized is one year or less or the amount is immaterial. The following table summarizes revenue
from contracts with customers for the three months ended March 31, 2019, and March 31, 2018:
March 31,
2019 2018
Products $ 582,404 $ 609,537
Services $ 22,033 $ 34,814 Inventories Inventories, which consist of products held
for resale, are stated at the lower of cost, determined using the first-in first-out, and net realizable value. Net realizable
value is the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose of the product. If the Company identifies excess, obsolete
or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is first identified.
Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Company’s
statements of operations. Share-Based Payments In June 2018, FASB issued ASU 2018-07, Compensation—Stock
Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, Equity—Equity-Based Payments
to Non-Employees. Accounts Receivable Included in “Accounts receivable”
on the consolidated balance sheets are amounts primarily related to customers. The Company estimates losses on receivables based
on known troubled accounts and historical experience of losses incurred. Receivables are considered impaired and written off when
it is probable that all contractual payments due will not be collected in accordance with the terms of the related agreement. Based
on experience and the judgment of management, the allowance for doubtful accounts was $0 as of March 31, 2019 and December 31,
2018. Fair Value Measurements The Company has adopted the provisions of ASC
Topic 820, Fair Value Measurements and Disclosures, The estimated fair value of certain financial
instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical
cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of
the Company’s short- and long-term credit obligations approximate fair value because the effective yields on these obligations,
which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded
conversion options, are comparable to rates of returns for instruments of similar credit risk. ASC Topic 820 defines fair value as the exchange
price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous
market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820
also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use
of unobservable inputs when measuring fair value. ASC Topic 820 describes three levels of inputs that may be used to measure fair
value: Level 1 – Quoted prices in active markets for identical
assets or liabilities Level 2 – Quoted prices for similar assets and liabilities
in active markets or inputs that are observable Level 3 – Inputs that are unobservable (for example
cash flow modeling inputs based on assumptions) During the year ended December 31, 2018, the
Company accounted for a derivative liability in connection with the conversion feature of convertible debt, classified as a Level
3 liability, as the only financial liability measured at fair value on a recurring basis. As of December 31, 2018, and during the
three months ended March 31, 2019, the Company had no derivative liability. Property and Equipment Property and equipment are stated at cost less
accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. For furniture
and fixtures the useful life is 5 years, Leasehold Improvements are depreciated over the 2-year lease term. Expenditures for additions
and improvements are capitalized; repairs and maintenance are expensed as incurred. Convertible Instruments The Company evaluates and accounts for conversion
options embedded in convertible instruments in accordance with ASC 815, Derivatives and Hedging Activities. GAAP requires companies to bifurcate conversion
options from their host instruments and account for them as free standing derivative financial instruments according to certain
criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument
are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that
embodies both the embedded derivative instrument and the host contract is not remeasured at fair value under other GAAP with changes
in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument
would be considered a derivative instrument. The Company accounts for convertible instruments
(when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows:
the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt
instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note
transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over
the term of the related debt to their stated date of redemption. The Company accounts for the conversion of
convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt- and equity-linked
derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any
difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities. Advertising Advertising and marketing expenses are charged to operations as
incurred. Income Taxes The Company use the asset and liability method
of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. ASC Topic 740.10.30 clarifies the accounting
for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold
and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken
in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. The Company has no material uncertain tax positions. Concentration of Credit Risk Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the
Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes
that the Company is not exposed to significant risks on such accounts. Also, the Company has not experienced losses on accounts
receivable and management believes that the Company is not exposed to significant risks with respect to them. Goodwill and Intangible Assets Goodwill and intangible assets that have indefinite
useful lives are not amortized but are evaluated for impairment annually or whenever events or changes in circumstances indicate
that the carrying value may not be recoverable. The Company records intangible assets at fair value, estimated using a discounted
cash flow approach. The Company amortizes its intangible assets that have finite lives using either the straight-line method or
base on estimated future cash flows to approximate the pattern in which the economic benefit of the assets will be utilized. Amortization
is recorded over the estimated useful lives ranging from 14 to 20 years. The Company reviews intangible assets subject to amortization
quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment
or a change in the remaining useful life. Conditions that would indicate impairment and trigger a more frequent impairment assessment
include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value
of an asset, or an adverse action or assessment by a regulator. If the carrying value of an asset exceeds its undiscounted cash
flows, the Company will write-down the carrying value of the intangible assets to its fair value in the period identified. The
Company generally calculates fair value as the present value of estimated future cash flows to be generated by the asset using
a risk-adjusted discount rate. If the estimate of an intangible asset’s remaining useful life is changed, the Company will
amortize the remaining carrying value of the intangible asset prospectively over the revised remaining useful life. Consistent
with prior years, the Company conducted its annual impairment test of goodwill during the fourth quarter of the year ended December
31, 2018. The Company operates as a single operating segment with one reporting unit and consequently evaluates goodwill for impairment
base on an evaluation of the fair value of the Company as a whole. The estimate of fair value requires significant judgement. Any loss resulting from an impairment
test would be reflected in operating income in the Company’s consolidated statements of income. The annual impairment testing
process is subjective and requires judgment at many points throughout the analysis. If these estimates or their related assumptions
change in the future, the Company may be required to record impairment charges for these assets not previously recorded. In January 2017, FASB issued ASU 2017-04,
Simplifying the Test for Goodwill Impairment The Company evaluates intangible assets
and long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of
such assets may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market
conditions, or other events that indicate an asset’s carrying amount may not be recoverable. Recoverability of these assets
is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate.
If the undiscounted cash flows used in the test of recoverability are less than the carrying amount of these assets, the carrying
amount of such assets is reduced to fair value. The Company evaluates and tests the recoverability of its goodwill for impairment
at least annually during its fourth quarter or each fiscal year or more often if circumstances indicate that goodwill may not be
recoverable. There was no impairment of intangible assets, long-lived assets or goodwill during the three months ended March 31,
2019. Recent Accounting Pronouncements In February 2016, FASB issued ASU
2016-02, Leases (Topic 842), The Company does not believe there
are any other recently issued, but not yet effective, accounting standards that would have a significant impact on the Company’s
financial position or results of operations. |
