Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2015 |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates |
The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), which 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 date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to estimated useful lives of depreciable assets, allowance for doubtful accounts, valuation allowance on the company’s deferred tax assets, and recoverability of intangible assets. The company is also required to make certain estimates with regard to the valuation of awards and forfeiture rates for its share-based award programs. Estimates and assumptions are reviewed periodically and the effects of revision are reflected in the financial statements in the period they are deemed to be necessary. Accordingly actual results could differ from those estimates. |
The accompanying consolidated financial statements include the accounts of the company and its wholly-owned subsidiary, PDV Spectrum Holding Company, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications |
Certain prior year amounts have been reclassified to conform to the financial statements for the year ended March 31, 2015 financial statement presentation. These reclassifications had no effect on previously reported results of operations, cash flows, assets, liabilities or equity for the years presented. |
Cash and cash equivalents | Cash and cash equivalents |
All highly liquid investments with maturities of three months or less of the time of purchase are considered cash equivalents. Cash equivalents are stated at cost, which approximates quoted market value and include amounts held in money market funds. |
Allowance for Uncollectible Receivables | Allowance for Uncollectible Receivables |
An allowance for uncollectible receivables is estimated based on a combination of write-off history, aging analysis and any specific known troubled accounts. The company reviews its allowance for uncollectible receivables on a quarterly basis. Past due balances meeting specific criteria are reviewed individually for collectability. At March 31, 2015 and March 31, 2014, management provided an allowance of $7,977 and $12,619, respectively, for certain slow paying accounts. |
Furniture, Fixture and Equipment | Furniture, Fixture and Equipment |
Furniture, fixture and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. |
The carrying amount at the balance sheet date of long-lived assets under construction in process include construction costs to date on capital projects that have not been completed and assets being constructed that are not ready to be placed into service. These costs will be transferred to furniture, fixture and equipment when substantially all of the activities necessary to prepare the assets for their intended use are completed. Depreciation commences upon completion. |
Intangible Assets | Intangible Assets |
Intangible assets are wireless licenses that will be used to provide the exclusive right to utilize designated radio frequency spectrum to provide wireless communication services. While licenses are issued for only a fixed time, generally ten years, such licenses are subject to renewal by the Federal Communications Commission (“FCC”). License renewals have occurred routinely and at nominal cost. There are currently no legal, regulatory, contractual, competitive, economic or other factors that limit the useful life of the company’s wireless licenses. As a result, the wireless licenses are treated as an indefinite-lived intangible asset. The company evaluates the useful life determination for wireless licenses each year to determine whether events and circumstances continue to support an indefinite useful life. The licenses are tested for impairment on an aggregate basis, as the company will be utilizing the wireless licenses on an integrated basis as a part of developing our nationwide network. The company performs the test of the fair values of wireless licenses annually using a discounted cash flow approach. |
Patent Costs | Patent Costs |
Costs to acquire a patent on certain aspects of the company’s technology have been capitalized. These amounts are amortized, subject to periodic evaluation for impairment, over statutory lives following award of the patent. Gross patent costs are $558,696 at March 31, 2015 and $556,052 at March 31, 2014 and the associated accumulated amortization amounted to $337,914 and $303,305, respectively. Amortization expense was $34,609, $42,830, and $37,510 for the years ended March 31, 2015, 2014 and 2013, respectively. The amortization expense is estimated to aggregate $35,000 per year over the next five year period. |
Long-Lived Asset Impairment | Long-Lived Asset Impairment |
The company evaluates long-lived assets, other than intangible assets with indefinite lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Asset groups are determined at the lowest level for which identifiable cash flows are largely independent of cash flows of other groups of assets and liabilities. When the carrying amount of a long-lived asset group is not recoverable and exceeds its fair value, an impairment loss is recognized equal to the excess of the asset group’s carrying value over the estimated fair value. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
Financial instruments, including cash, accounts receivable, accounts payable, accrued expenses and notes payable – affiliated entities are carried at cost, which management believes approximates fair value because of the short term maturity of these instruments. |
Revenue Recognition | Revenue Recognition |
The company recognizes revenue in the period in which the services are provided and when collectability of the revenue is reasonably assured. In accordance with the guidance provided in Accounting Standards Codification (“ASC”) Topic 605-45-45, Revenue Recognition – Principal Agent Considerations, the company has determined that it is the primary obligor with respect to the service revenue derived from sales of the company’s software applications through its domestic carrier partners. As a result, revenue is recorded at the gross amount billed to end-user customers for sales to the domestic carrier partners. The company recognizes revenue for its international carrier on the net amount billed since it has determined that it is not the primary obligor. The company also sells certain applications directly to end-users through its direct sales force, which are billed and collected directly by the company. |
In September 2014, Motorola made an upfront, fully-paid leasing fee of $7.5 million in order to lease a portion of the company’s FCC licenses. The payment of the fee was accounted for as Deferred Revenue as of September 30, 2014. The company recognizes leasing revenue in accordance with ASC Topic 840, Leases. The fee is amortized using the straight-line method over the lease term of approximately ten years which represents the time frame in which the benefits of the leased property are expected to be depleted. |
Cost of Revenue | Cost of Revenue |
The company’s cost of revenue includes the portion of service revenue retained by its domestic carrier partners pursuant to its agreements with these parties, which may include network services, connectivity, SMS service and special equipment expenses, sales, marketing, billing and other ancillary services. The company also includes the costs associated with the operation of its cloud-based solutions and dispatch network. |
Shipping and Handling Costs | Shipping and Handling Costs |
Costs associated to shipping and handling of two-way radios to dealers or end-user customers are recognized as incurred and included in cost of revenue in the statements of operations. |
Indirect sales commissions | Indirect Sales Commissions |
Cash consideration given to a dealer is presumed to be a reduction of revenue unless the company receives, or will receive, an identifiable benefit in exchange for the consideration, and the fair value of such benefit can be reasonably estimated, in which case the consideration will be recorded as a selling expense. The company will compensate its indirect sales representatives with an upfront commission and residual fees based on a customer’s continued use of its network solutions. When a commission is earned solely due to the selling activity relating to the company’s network solution, the cost is recorded as a selling expense. Estimated incentives payable to the indirect sales representatives will be regularly reviewed and recorded as accrued expenses on a monthly basis. |
Product Development Costs | Product Development Costs |
The company charges all product and development costs to expense as incurred. Types of expense incurred in product and development include employee compensation, consulting, travel, facility costs and equipment and technology costs. |
Advertising and Promotional Expense | Advertising and Promotional Expense |
The company expenses advertising and promotional costs as incurred. Cooperative advertising reimbursements from vendors are recorded net of advertising and promotional expense in the period in which the related advertising and promotional expense is incurred. In 2015, 2014 and 2013, no advertising costs were incurred. |
Stock Compensation | Stock Compensation |
The company accounts for stock options in accordance with US GAAP, which requires the measurement and recognition of compensation expense, based on the estimated fair value of awards granted to employees and directors. The company estimates the fair value of share-based awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense in the company’s statements of operations over the requisite service periods. |
To calculate option-based compensation, the company uses the Black-Scholes option-pricing model. The company’s determination of fair value of option-based awards on the date of grant using Black-Scholes model is affected by assumptions regarding a number of subjective variables. |
No tax benefits were attributed to the share-based compensation expense because a full valuation allowance was maintained for all net deferred tax assets. |
Income Taxes | Income Taxes |
The company follows the liability method of accounting for income taxes. Under this method, taxes consist of taxes currently payable plus those deferred due to temporary differences between the financial statement carrying amounts and the tax bases of certain assets and liabilities using tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is provided when it is more likely than not that some portion or the entire deferred tax asset will not be realized. |
Accounting for Uncertainty in Income Taxes | Accounting for Uncertainty in Income Taxes |
The company recognizes the effect of tax positions only when they are more likely than not to be sustained. Management has determined that the company had no uncertain tax positions that would require financial statement recognition or disclosure. The company is no longer subject to U.S. federal, state or local income tax examinations for periods prior to 2012. |
Net Loss Per Share of Common Stock | Net Loss Per Share of Common Stock |
Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. For purposes of the diluted net loss per share calculation, preferred stock, convertible notes payable-affiliated entities, stock options and warrants are considered to be potentially dilutive securities. Because the company has reported a net loss for the years ended March 31, 2015 and 2014, diluted net loss per common share is the same as basic net loss per common share for those periods. |
Common stock equivalents resulting from potentially dilutive securities approximated 1,000,000, 1,630,000 and 1,589,000 at March 31, 2015, 2014 and 2013, respectively, and have not been included in the dilutive weighted average shares of common stock outstanding, as their effects are anti-dilutive. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements |
In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09 Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of 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. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This guidance is effective for interim and annual periods beginning on or after December 15, 2016. The company is currently evaluating the impact of the adoption of this accounting standard update on its financial statements. |
In April 2015, FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which changes the presentation of debt issuance costs in the financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. The guidance is effective for annual reporting periods beginning after December 15, 2016, with early adoption permitted. The guidance will be applied retrospectively to each period presented. The adoption of this standard update is not expected to have any impact on the company’s financial statements. |
Subsequent Events Evaluation by Management | Subsequent Events Evaluation by Management |
Management has evaluated subsequent events for disclosure and/or recognition in the financial statements through the date that the financial statements were issued. |