Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Apr. 12, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | OLB GROUP, INC. | ||
Entity Central Index Key | 0001314196 | ||
Trading Symbol | OLBG | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Document Fiscal Period Focus | FY | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Public Float | $ 5,372,548 | ||
Entity Common Stock, Shares Outstanding | 162,350,364 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash | $ 111,586 | |
Accounts receivable, net | 406,110 | 27,790 |
Note receivable | ||
Prepaid expenses | 21,135 | |
Other current assets | 8,278 | |
Total Current Assets | 547,109 | 27,790 |
Other Assets: | ||
Property and equipment, net | 65,945 | |
Intangible assets, net | 4,148,096 | |
Goodwill | 6,858,216 | |
Other long-term assets | 379,908 | 4,965 |
TOTAL ASSETS | 11,999,274 | 32,755 |
Current Liabilities: | ||
Accounts payable | 467,526 | 138,134 |
Accrued compensation – related party | 640,009 | 416,738 |
Accrued expenses | 73,625 | |
Wages payable | ||
Other accrued liabilities | 15,152 | |
Note payable - current portion | 25,000 | |
Total Current Liabilities | 1,221,312 | 554,872 |
Long Term Liabilities: | ||
Note payable, net | 9,500,000 | |
Notes payable – related parties | 3,000,000 | |
Other long-term liabilities | ||
Total Liabilities | 13,721,312 | 554,872 |
Commitments and contingencies (Note 15) | ||
Stockholders' Deficit: | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.0001 par value; 200,000,000 shares authorized, 162,350,364 and 162,325,364 shares issued and outstanding, respectively | 16,237 | 16,234 |
Additional paid-in capital | 15,770,192 | 15,576,572 |
Accumulated deficit | (17,508,467) | (16,114,923) |
Total Stockholders' Deficit | (1,722,038) | (522,117) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 11,999,274 | 32,755 |
Predecessor [Member] | ||
Current Assets: | ||
Cash | 225,227 | |
Accounts receivable, net | 564,014 | |
Note receivable | 357,330 | |
Prepaid expenses | 69,119 | |
Other current assets | 85,839 | |
Total Current Assets | 1,301,529 | |
Other Assets: | ||
Property and equipment, net | 118,240 | |
Intangible assets, net | 1,784,532 | |
Goodwill | ||
Other long-term assets | 412,513 | |
TOTAL ASSETS | 3,616,814 | |
Current Liabilities: | ||
Accounts payable | 2,323,926 | |
Accrued compensation – related party | ||
Accrued expenses | ||
Wages payable | 472,912 | |
Other accrued liabilities | 381,031 | |
Note payable - current portion | 13,911,233 | |
Total Current Liabilities | 17,089,102 | |
Long Term Liabilities: | ||
Note payable, net | ||
Notes payable – related parties | ||
Other long-term liabilities | 31,909 | |
Total Liabilities | 17,121,011 | |
Commitments and contingencies (Note 15) | ||
Stockholders' Deficit: | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.0001 par value; 200,000,000 shares authorized, 162,350,364 and 162,325,364 shares issued and outstanding, respectively | ||
Additional paid-in capital | 5,514,114 | |
Accumulated deficit | (19,018,311) | |
Total Stockholders' Deficit | (13,504,197) | |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 3,616,814 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 162,350,364 | 162,325,364 |
Common stock, shares outstanding | 162,350,364 | 162,325,364 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 12 Months Ended | |
Apr. 08, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | |||
Transaction and processing fees | $ 8,863,008 | ||
Merchant equipment sales and other | 35,756 | ||
Other revenue | 121,112 | 183,998 | |
Total revenue | 9,019,876 | 183,998 | |
Operating expenses: | |||
Processing and servicing costs, excluding merchant portfolio amortization | 5,992,619 | 19,398 | |
Amortization expense | 541,904 | ||
Salaries and wages | 1,401,192 | 525,000 | |
Outside commissions | 181,510 | ||
General and administrative expenses | 1,435,717 | 274,996 | |
Impairment of goodwill | |||
Total operating expenses | 9,552,942 | 819,394 | |
Income (loss) from operations | (533,066) | (635,396) | |
Other Income (Expense): | |||
Interest expense | (800,467) | ||
Interest expense, related party | (82,849) | (26,901) | |
Gain on settlement of payables | 16,039 | ||
Other | 6,799 | ||
Total other expense | (860,478) | (26,901) | |
Net Loss | $ (1,393,544) | $ (662,297) | |
Net loss per share, basic and diluted | $ (0.01) | $ 0 | |
Weighted average shares outstanding, basic and diluted | 162,343,378 | 155,996,684 | |
Predecessor [Member] | |||
Revenue: | |||
Transaction and processing fees | $ 3,164,949 | $ 14,656,301 | |
Merchant equipment sales and other | 9,590 | 251,408 | |
Other revenue | |||
Total revenue | 3,174,539 | 14,907,709 | |
Operating expenses: | |||
Processing and servicing costs, excluding merchant portfolio amortization | 1,748,141 | 9,395,994 | |
Amortization expense | 90,739 | 362,956 | |
Salaries and wages | 374,345 | 2,782,079 | |
Outside commissions | 508,296 | 336,290 | |
General and administrative expenses | 367,524 | 3,969,301 | |
Impairment of goodwill | 7,914,269 | ||
Total operating expenses | 3,089,045 | 24,760,889 | |
Income (loss) from operations | 85,494 | (9,853,180) | |
Other Income (Expense): | |||
Interest expense | (832,564) | (3,836,495) | |
Interest expense, related party | |||
Gain on settlement of payables | |||
Other | 908 | (131,846) | |
Total other expense | (831,656) | (3,968,341) | |
Net Loss | $ (746,162) | $ (13,821,521) | |
Net loss per share, basic and diluted | $ (0.14) | ||
Weighted average shares outstanding, basic and diluted | 100,482,497 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Common Stock | Additional Paid In Capital | Accumulated Deficit | Total |
Balance at Jan. 01, 2017 | $ 15,598 | $ 14,942,601 | $ (15,452,626) | $ (494,427) |
Balance, shares at Jan. 01, 2017 | 155,979,297 | |||
Common stock issued for related party debt | $ 252 | 251,353 | 251,605 | |
Common stock issued for related party debt, shares | 2,516,050 | |||
Common stock issued for accrued compensation | $ 381 | 380,121 | 380,502 | |
Common stock issued for accrued compensation, shares | 3,805,017 | |||
Common stock issued for services | $ 3 | 2,497 | 2,500 | |
Common stock issued for services, shares | 25,000 | |||
Net loss for the year | (662,297) | (662,297) | ||
Balance at Dec. 31, 2017 | $ 16,234 | 15,576,572 | (16,114,923) | (522,117) |
Balance, shares at Dec. 31, 2017 | 162,325,364 | |||
Common stock issued for services | $ 3 | 3,747 | 3,750 | |
Common stock issued for services, shares | 25,000 | |||
Warrants issued as non-cash interest | 7,660 | 7,660 | ||
Option expense for officers | 182,213 | 182,213 | ||
Net loss for the year | (1,393,544) | (1,393,544) | ||
Balance at Dec. 31, 2018 | $ 16,237 | $ 15,770,192 | $ (17,508,467) | $ (1,722,038) |
Balance, shares at Dec. 31, 2018 | 162,350,364 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 12 Months Ended | |
Apr. 08, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (1,393,544) | $ (662,297) | |
Adjustments to Reconcile Net Loss to Net Cash Used in Operations: | |||
Depreciation and amortization | 582,559 | ||
Paid in kind interest | |||
Stock based compensation | 185,963 | 2,500 | |
Non-cash interest expense | 7,660 | ||
Gain on settlement of payables | (16,039) | ||
Bad debt expense | 38,113 | ||
Loss on disposal of property and equipment | |||
Gain in investment accounted for under the equity method | |||
Loss on impairment of goodwill | |||
Changes in assets and liabilities: | |||
Accounts receivable | 63,869 | (27,790) | |
Prepaid expenses | 63,810 | ||
Other current assets | (8,278) | ||
Other long-term assets | (26,576) | ||
Accounts payable | 149,161 | 104,406 | |
Accrued compensation – related party | 239,310 | 501,620 | |
Other accrued liabilities - related party | 26,901 | ||
Other accrued liabilities | (17,100) | ||
Other long-term liabilities | |||
Net Cash Used in Operating Activities | (131,092) | (54,660) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment | |||
Proceeds from note receivable | 174,967 | ||
Cash received in business combination | 42,711 | ||
Net Cash provided by Investing Activities | 217,678 | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from notes payable - related parties | 3,055,000 | 53,500 | |
Payment on note payable - related party | (30,000) | ||
Payment on notes payable | (3,000,000) | ||
Net Cash provided by (used in) Financing Activities | 25,000 | 53,500 | |
Net Change in Cash | 111,586 | (1,160) | |
Cash - Beginning of Period | 1,160 | ||
Cash - End of Period | 111,586 | ||
Cash Paid For: | |||
Interest | 728,000 | ||
Income taxes | |||
Supplemental disclosure of non-cash investing and financing activities: | |||
Stock issued in conversion of debt and related accrued interest | 251,605 | ||
Stock issued in conversion of accrued salary | 380,502 | ||
Forgiveness of accrued compensation credited to additional paid-in capital | |||
Preferred stock converted into common stock | |||
Predecessor [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | (746,162) | (13,821,521) | |
Adjustments to Reconcile Net Loss to Net Cash Used in Operations: | |||
Depreciation and amortization | 109,225 | 446,525 | |
Paid in kind interest | 275,369 | 1,614,564 | |
Stock based compensation | 20,001 | ||
Non-cash interest expense | |||
Gain on settlement of payables | |||
Bad debt expense | 656,131 | ||
Loss on disposal of property and equipment | 15,539 | ||
Gain in investment accounted for under the equity method | 171,469 | ||
Loss on impairment of goodwill | 7,914,269 | ||
Changes in assets and liabilities: | |||
Accounts receivable | 99,190 | 304,519 | |
Prepaid expenses | 35,445 | 36,876 | |
Other current assets | (298) | 3,211 | |
Other long-term assets | 6,775 | 32,523 | |
Accounts payable | (219,888) | 1,746,706 | |
Accrued compensation – related party | (3,156) | 87,909 | |
Other accrued liabilities - related party | |||
Other accrued liabilities | 63,905 | (220,416) | |
Other long-term liabilities | (2,511) | (9,796) | |
Net Cash Used in Operating Activities | (382,106) | (1,001,491) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (6,274) | (46,906) | |
Proceeds from note receivable | 182,362 | 200,000 | |
Cash received in business combination | |||
Net Cash provided by Investing Activities | 176,088 | 153,094 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from notes payable - related parties | |||
Payment on note payable - related party | |||
Payment on notes payable | (512,583) | ||
Net Cash provided by (used in) Financing Activities | (512,583) | ||
Net Change in Cash | (206,018) | (1,360,980) | |
Cash - Beginning of Period | 225,227 | $ 225,227 | 1,586,207 |
Cash - End of Period | 19,209 | 225,227 | |
Cash Paid For: | |||
Interest | 458,812 | 2,040,338 | |
Income taxes | |||
Supplemental disclosure of non-cash investing and financing activities: | |||
Stock issued in conversion of debt and related accrued interest | |||
Stock issued in conversion of accrued salary | |||
Forgiveness of accrued compensation credited to additional paid-in capital | 669,529 | ||
Preferred stock converted into common stock | $ 460 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - GACP Finance Co., LLC, [Member] | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Consideration | |
Consideration issued | $ 12,500,000 |
Identified assets and liabilities | |
Cash | 42,711 |
Accounts and other receivables | 480,302 |
Note receivable | 174,967 |
Prepaid expenses | 84,945 |
Long-term assets | 348,367 |
Property and equipment | 106,600 |
Accounts payable | (180,231) |
Accrued Expenses | (105,877) |
Merchant portfolios | 2,190,000 |
Tradename | 2,500,000 |
Total identified assets and liabilities | 5,641,784 |
Excess purchase price allocated to goodwill | $ 6,858,216 |
Background and Recent Acquisiti
Background and Recent Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BACKGROUND AND RECENT ACQUISITIONS | NOTE 1 – BACKGROUND AND RECENT ACQUISITIONS Background The OLB Group, Inc. (“OLB” the “Company”) was incorporated in the State of Delaware on November 18, 2004 and provides services through its wholly-owned subsidiaries. The Company provides integrated financial and transaction processing services to businesses throughout the United States. Through its eVance Capital, Inc. subsidiary (“eVance”), the Company provides an integrated suite of third-party merchant payment processing services and related proprietary software enabling products that deliver credit and debit card-based internet payment processing solutions primarily to small and mid-sized merchants operating in physical “brick and mortar” business environments, on the internet and in retail settings requiring both wired and wireless mobile payment solutions. eVance operates as an independent sales organization (“ISO”) generating individual merchant processing contracts in exchange for future residual payments. As a wholesale ISO, eVance has a direct contractual relationship with the merchants and takes greater responsibility in the approval and monitoring of merchants than do retail ISOs and as a result, receives additional consideration for this service and risk. The Company’s Securus365, Inc. subsidiary operates as a retail ISO and receives residual income as commission for merchants it places with third party processors. CrowdPay.us, Inc. (“CrowdPay”) is a Crowdfunding platform used to facilitate a capital raise anywhere from $1,000,0000 -$50,000,000 of various types of securities under Regulation D, Regulation Crowdfunding, Regulation A and the Securities Act of 1933. To date, the activities of this subsidiary have been insignificant. Omnisoft.io, Inc. (“Omnisoft”) operates a software platform for small merchants The Omnicommerce applications work on an iPad, mobile device and the web and allows you to sell a store’s products in a physical, retail setting. To date, the activities of this subsidiary have been insignificant. We also provide ecommerce development and consulting services on a project by project basis. Memorandum of Sale On April 9, 2018, Securus365, Inc., a Delaware corporation (“Securus”), eVance Capital, Inc., a Delaware corporation (“eVance Capital”), and eVance Inc., a Delaware corporation (“eVance”, and collectively with Securus and eVance Capital, the “Purchasers”), each of which Purchaser is a newly formed wholly-owned subsidiary of OLB, entered into a Memorandum of Sale (the “Memorandum of Sale”) by and among the Purchasers and GACP Finance Co., LLC, a Delaware limited liability company (“GACP”), in its capacity as administrative agent and collateral agent to certain secured lenders of the Debtors (as defined below), pursuant to which the Purchasers acquired substantially all of the assets of the Debtors (the “Asset Acquisition”) through a foreclosure sale arranged by GACP under the Uniform Commercial Code of the State of New York (“UCC”) of the collateral of Excel Corporation (“Excel”) and its subsidiaries Payprotec Oregon, LLC, Excel Business Solutions, Inc. and eVance Processing, Inc. (Excel and such subsidiaries, collectively, the “Debtors”) under the Loan and Security Agreement, dated as of November 2, 2016, by and among GACP, the lenders thereunder and the Debtors and related loan documents, as amended (the “Excel Loan and Security Agreement”). GACP exercised its post-default remedies and realized on the collateral securing the Debtors’ obligations under the Excel Loan and Security Agreement by conducting a public auction of certain assets of the Debtors on April 9, 2018 in accordance with the UCC. The Purchasers submitted the Memorandum of Sale at such auction, which constituted the Purchasers’ bid for substantially all of the assets of the Debtors (“Acquired Assets”), which bid was accepted by GACP on April 9, 2018 in connection with the simultaneous signing and closing (the “Closing”) of the transactions contemplated under the Memorandum of Sale and the Credit Agreement (defined below). In consideration for the sale and transfer of the Acquired Assets at the Closing, the Purchasers assumed certain post-Closing obligations under assigned contracts and issued GACP a note payable in the amount of $12,500,000, through the deemed simultaneous financing of such purchase price to the Purchasers under the Credit Agreement. Pursuant to the Memorandum of Sale, the Purchasers purchased from GACP and accepted all of the Debtors’ right, title and interest in and to the Acquired Assets “as is”, “where is” and “with all faults” and without any representations or warranties, express or implied, of any nature whatsoever. Any representations made by the parties in the Memorandum of Sale did not survive the Closing, and there is no indemnification rights for either party’s breach. Common Control Mergers Effective May 9, 2018, the Company entered into a share exchange agreement with Crowdpay.US, Inc., a New York corporation for which the Company issued 87,500,000 shares of common stock for all of the authorized stock of Crowdpay. Crowdpay became a wholly owned subsidiary of OLB. The Company’s two majority stockholders were the two stockholders of Crowdpay and as a result this transaction was accounted for as a common control merger. See Note 8. Effective May 9, 2018, the Company entered into a share exchange agreement with Omnisoft , Inc., a Delaware corporation for which the Company issued 55,000,000 shares of common stock for all of the authorized stock of Omnisoft. Omnisoft became a wholly owned subsidiary of OLB. The Company’s two majority stockholders were the two stockholders of Omnisoft and as a result this transaction was accounted for as a common control merger. See Note 8. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of financial statements in conformity with U.S. 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 date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s accounting estimates include the collectability of receivables, useful lives of long lived assets and recoverability of those assets, valuation allowances for income taxes, stock based compensation and estimates made for business combinations. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, eVance, Securus, Crowdpay.US, and OMNISOFT, Inc. All significant intercompany transactions and balances have been eliminated. Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision–making group in deciding how to allocate resources and in assessing performance. Our chief operating decision–making group is composed of the chief executive officer. We currently operate in one segment surrounding our ISO operations. Cash and Cash Equivalents The Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less as cash and cash equivalents. The carrying amount of financial instruments included in cash and cash equivalents approximates fair value because of the short maturities for the instruments held. The Company had no cash equivalents as of December 31, 2018 and 2017. Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company’s cash is deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount. Accounts Receivable Accounts receivable represent contractual residual payments due from the Company’s processing partners or other customers. Residual payments are determined based on transaction fees and revenues from the credit and debit card processing activity of merchants for which the Company’s processing partners pay the Company. Based on collection experience and periodic reviews of outstanding receivables, management considers all accounts receivable for our residual payments to be fully collectible and accordingly, no allowance for doubtful accounts is required; however, Crowdpay has a recorded an allowance of $38,113 and $0, as of December 31, 2018 and 2017, respectively. Reserve for Chargeback Losses Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged to the merchant. If the merchant has inadequate funds, the Company must bear the credit risk for the full amount of the transaction. The Company evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly. For the years ended December 31, 2018 and 2017, respectively, chargebacks were immaterial. Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are amortized over the lesser of the remaining term of the lease or the estimated useful life of the asset. Expenditures for repairs and maintenance are expensed as incurred. Impairment of Long–Lived Assets The Company periodically reviews the carrying value of its long-lived assets held and used at least annually or when events and circumstances warrant such a review. If significant events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. Cash flow projections are sometimes based on a group of assets, rather than a single asset. If cash flows cannot be separately and independently identified for a single asset, the Company determines whether impairment has occurred for the group of assets for which it can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, it measures any impairment by comparing the fair value of the asset group to its carrying value. If the fair value of an asset or asset group is determined to be less than the carrying amount of the asset or asset group, impairment in the amount of the difference is recorded. Merchant Portfolios Merchant portfolios are valued at fair value of merchant customers on the date of acquisition and are amortized over their estimated useful lives (7 years). Goodwill The Company accounts for business combinations under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. The Company tests for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. In accordance with its policies, the Company performed a qualitative assessment of indefinite lived intangibles and goodwill at December 31, 2018 and determined there was no impairment of indefinite lived intangibles and goodwill. For the year ended December 31, 2017, during the annual assessment of goodwill, management determined that goodwill had been fully impaired. Due to this impairment the Company recorded an impairment charge of $7.9 million. The impairment charge resulted from the default of the loan with GACP Finance Co. LLC. Business Combinations Acquisitions are accounted for using the acquisition method of accounting. The purchase price of an acquisition is allocated to the assets acquired and liabilities assumed using the estimated fair values at the acquisition date. Transaction costs are expensed as incurred. The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired and identified based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Stock-based Compensation We account for equity-based transactions with nonemployees under the provisions of ASC Topic No. 505-50, Equity-Based Payments to Non-Employees We account for employee stock-based compensation in accordance with the guidance of Financial Accounting Standards Board (“FASB”) ASC Topic 718, Compensation—Stock Compensation, Net Loss per Share Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares for the year ended December 31, 2018 does not include warrants to acquire 1,200,000 shares of common stock because of their anti-dilutive effect. There were no potentially dilutive shares as of December 31, 2017. Revenue Recognition and Cost of Revenues The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. In the case of “wholesale” residual revenue in which the Company has a direct contractual relationship with the merchant, bears risk of chargebacks and performs underwriting on the merchants, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees as expenses. In cases of residual revenue where the Company is not responsible for merchant underwriting and has no chargeback liability and has no or limited contractual relationship with the merchant, the Company records the amount it receives from the processor net of interchange and other processing fees as revenue. Income Taxes Income taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to tax net operating loss carryforwards. The deferred tax assets and liabilities represent the future tax return consequences of these differences, which will either be taxable or deductible when assets and liabilities are recovered or settled, as well as operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established against deferred tax assets when in the judgment of management, it is more likely than not that such deferred tax assets will not become available. Because the judgment about the level of future taxable income is dependent to a great extent on matters that may, at least in part, be beyond the Company’s control, it is at least reasonably possible that management’s judgment about the need for a valuation allowance for deferred taxes could change in the near term. Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of December 31, 2018, and 2017, no liability for unrecognized tax benefits was required to be reported. Fair Value Measurements Fair value is defined 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 No. 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as described below: Level 1: Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly. Level 2 inputs include quoted prices for similar assets, quoted prices in markets that are not considered to be active, and observable inputs other than quoted prices such as interest rates. Level 3: Level 3 inputs are unobservable inputs. The following required disclosure of the estimated fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The methods and assumptions used to estimate the fair values of each class of financial instruments are as follows: Cash and Cash Equivalents, Accounts Receivable, and Accounts Payable. The items are generally short-term in nature, and accordingly, the carrying amounts reported on the consolidated balance sheets are reasonable approximations of their fair values. The carrying amounts of Notes Receivable and Notes Payable approximate the fair value as the notes bear interest rates that are consistent with current market rates. Subsequent Events Management evaluates events that have occurred after the balance sheet date and through the date the financial statements are issued. Based upon the review, management did not identify any recognized or non-recognized subsequent events which would have required an adjustment or disclosure in the financial statements, except as described in Note 17. Subsequent Events Recently Adopted Accounting Standards In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Clarification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which eliminates the diversity in practice related to classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years and early adoption is permitted, including adoption in an interim period. The adoption of this ASU has had no material impact on the Company’s consolidated financial statements and disclosures. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350) In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception Earnings Per Share Recent Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers, to establish ASC Topic 606, (ASC 606). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition and most industry-specific guidance throughout the Industry Topics of the Codification. The core principle of the guidance 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. The guidance includes a five-step framework that requires an entity to: (i) identify the 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 revenue when the entity satisfies a performance obligation. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date, which amended the effective date for nonpublic entities to annual reporting periods beginning after December 15, 2018. In March 2016, the FASB issued an update (ASU 2016-08) to ASC 606, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the guidance on principal versus agent considerations. In April 2016, the FASB issued an update (ASU 2016-10) to ASC 606, Identifying Performance Obligations and Licensing, which provides clarification related to identifying performance obligations and licensing implementation guidance under ASU 2014-09. In May 2016, the FASB issued an update (ASU 2016-12) to ASC 606, Narrow-Scope Improvements and Practical Expedients, which amends guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. In December 2016, the FASB issued an update (ASU 2016-20) to ASC 606, Technical Corrections and Improvements, which outlines technical corrections to certain aspects of the new revenue recognition standard such as provisions for losses on construction type contracts and disclosure of remaining performance obligations, among other aspects. The effective date and transition requirements are the same as those in ASU 2014-09 for all subsequent clarifying guidance discussed herein. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company has elected to apply the modified retrospective method. Accordingly, the new revenue standard will be applied prospectively in the Company’s financial statements from January 1, 2019 forward and reported financial information for historical comparable periods will not be revised and will continue to be reported under the accounting standards in effect during those historical periods. The Company has reviewed other recently issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any other pronouncements to have an impact on its results of operations or financial position. |
Liquidity and Capital Resources
Liquidity and Capital Resources | 12 Months Ended |
Dec. 31, 2018 | |
Liquidity and Capital Resources [Abstract] | |
LIQUIDITY AND CAPITAL RESOURCES | NOTE 3 – LIQUIDITY AND CAPITAL RESOURCES At December 31, 2018, the Company had cash of $111,586 and a working capital deficit of $649,203. For the year ended December 31, 2018, the Company’s net loss and cash used in operating activities was $1,393,544 and $131,092, respectively. T |
Note Receivable
Note Receivable | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
NOTE RECEIVABLE | NOTE 4 – NOTE RECEIVABLE On November 30, 2017, the predecessor entity entered into a forbearance agreement with MoneyonMobile, Inc. (formerly Calpain, Inc) concerning a $675,000 note payable dated April 12, 2016. In the agreement, MoneyonMobile agreed to a periodic payment schedule for the principal of the note with the first payment of $200,000 due and paid on December 15, 2017. The remain balance of $475,000 was to be paid in six-monthly installments beginning January 15, 2018 with a final payment made on June 15, 2018. Due to certain financial uncertainties with MoneyonMobile, management of the predecessor determined it necessary to reserve for the final payments due on the note and recorded bad debt expense of $117,670 during the year ended December 31, 2017. During the period from January 1, 2018 to April 8, 2018, the predecessor collected $182,362 and subsequent to the date the Company completed the business combination (Note 7), the Company collected the remaining $174,967. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 – PROPERTY AND EQUIPMENT Property and equipment are summarized as follows: December 31 December 31, 2017 2018 2017 Predecessor Furniture and Fixtures $ 14,895 $ - $ 36,471 Office Equipment 73,205 - 180,576 Leasehold improvements 6,208 - - Computer Software 12,292 - 63,607 106,600 - 280,654 Accumulated depreciation (40,655 ) - (162,414 ) Property and equipment, net $ 65,945 $ - $ 118,240 Depreciation expense was $40,655 and $0 for the years ended December 31, 2018 and 2017, respectively. As it pertains to the predecessor, for the period from January 1, 2018 through April 8, 2018, depreciation expense was $18,486 and for the year ended December 31, 2017, depreciation expense was $83,569. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 6 – INTANGIBLE ASSETS Other assets consist of the following as of: December 31 December 31, 2017 2018 2017 Predecessor Merchant Portfolios $ 2,190,000 $ - $ 2,540,690 Less Accumulated Amortization (208,571 ) - (756,158 ) Net residual portfolios $ 1,981,429 $ - $ 1,784,532 December 31 December 31, 2017 2018 2017 Predecessor Trade name $ 2,500,000 $ - $ - Less Accumulated Amortization (333,333 ) - - Net trade name $ 2,166,667 $ - $ - Amortization expense amounted to $541,904 for the year ended December 31, 2018. The predecessor’s amortization expense for the period from January 1, 2018 to April 8, 2018 and for the year ended December 31, 2017 was $90,739 and $362,956, respectively. The Company’s merchant portfolios and tradename are being amortized over respective useful lives of 7 and 5 years. The following sets forth the estimated amortization expense related to amortizing intangible assets for the years ended December 31: 2019 $ 812,857 2020 $ 812,857 2021 $ 812,857 2022 $ 812,857 2023 $ 479,524 Thereafter $ 417,144 The weighted average remaining useful life of amortizing intangible assets was 6 years at December 31, 2018. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 7 – BUSINESS COMBINATIONS As disclosed in Note 1, on April 9, 2018, the Company entered into a Memorandum of Sale by and among the Purchasers and GACP. In consideration for the sale and transfer of the Acquired Assets at the Closing, the Company assumed certain post-Closing obligations under assigned contracts and issued GACP a note payable for $12,500,000, through the deemed simultaneous financing of such purchase price to the Purchasers under the Credit Agreement. The Company accounted for the transaction as a business combination under ASC 805 and as a result, allocated the fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date as outlined in the table below. The results of operations of the business acquired by the Company have been included in the consolidated statements of operations since the date of acquisition. The excess of the purchase price over the estimated fair values of the underlying identifiable assets acquired and liabilities assumed was allocated to goodwill. The amount assigned to goodwill was deemed appropriate based on several factors, including: (i) the multiple paid by market participants for businesses in the merchant card processing business; (ii) levels of eVance Payments, current and future projected cash flows; and (iii) the Company's strategic business plan. Goodwill is expected to be deductible for tax purposes. The allocation of the purchase price and the estimated fair market values of the assets acquired and liabilities assumed are shown below: Consideration Consideration issued $ 12,500,000 Identified assets and liabilities Cash 42,711 Accounts and other receivables 480,302 Note receivable 174,967 Prepaid expenses 84,945 Long-term assets 348,367 Property and equipment 106,600 Accounts payable (180,231 ) Accrued Expenses (105,877 ) Merchant portfolios 2,190,000 Tradename 2,500,000 Total identified assets and liabilities 5,641,784 Excess purchase price allocated to goodwill $ 6,858,216 Unaudited pro forma results of operations for the years ended December 31, 2018 and 2017, as if the Company and its subsidiaries had been combined on January 1, 2017, follow. The pro forma results include estimates and assumptions which management believes are reasonable. The pro forma results do not include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the date indicated, or which may result in the future. The unaudited pro forma results of operations are as follows: 2018 2017 Revenues $ 12,194,415 $ 15,091,707 Operating loss $ (124,442 ) $ (3,023,848 ) Net loss $ (1,816,576 ) $ (6,979,090 ) Net loss per share – basic and diluted $ (0.01 ) $ (0.04 ) |
Common Control Mergers
Common Control Mergers | 12 Months Ended |
Dec. 31, 2018 | |
Common Control Mergers | |
COMMON CONTROL MERGERS | NOTE 8 – COMMON CONTROL MERGERS On May 9, 2018, the Company acquired 100% of Omnisoft in exchange for the issuance of 55,000,000 shares of common stock. The acquisition of Omnisoft., was determined to be a common control transaction as each Company has the same two shareholder with a majority ownership. As a result, the assets and liabilities assumed were recorded on the Company's consolidated financial statements at their respective carry-over basis. Under ASC 805, "Business Combinations," the Company recorded the common control merger as of the earliest date presented in these consolidated financial statements, or January 1, 2017 as follows: Accounts receivable $ 250 Accounts payable (602 ) Accrued expenses – related party (265,319 ) Net liabilities assumed $ (265,671 ) The results of operations included in the consolidated statement of operations for the year ended December 31, 2017 as a result of the common control merger were as follows: Revenue $ 250 Operating expenses (134,154 ) Net loss $ (133,904 ) On May 9, 2018, the Company acquired 100% of Crowdpay in exchange for 87,500,000 shares of common stock. The acquisition of Crowdpay., as a wholly owned subsidiary is considered a common control transaction as each Company has the same shareholder with a majority ownership. As a result, the assets and liabilities assumed were recorded on the Company's consolidated financial statements at their respective carry-over basis. Under ASC 805, "Business Combinations," the Company recorded the common control merger as of the earliest date presented in these consolidated financial statements, or January 1, 2017 as follows: Accounts receivable $ 27,540 Other receivable – related party 1,705 Accounts payable and accrued expenses (48,472 ) Accrued expenses – related party (149,645 ) Net liabilities assumed $ (168,872 ) The results of operations included in the consolidated statement of operations for the year ended December 31, 2017 as a result of the common control merger were as follows: Revenue $ 132,205 Operating expenses (261,860 ) Net loss $ (129,655 ) |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 9 – NOTES PAYABLE As of December 31, 2017, the Company had a balance due on its note payable to GACP of $13,911,233. The Loan accrues interest of 18% per annum of which 13% is payable in cash monthly and 5% is payable in kind (PIK). In order to finance the Asset Acquisition, GACP, as administrative agent and collateral agent ("Agent"), and as the initial sole lender thereunder, provided a term loan of $12,500,000 (the "Term Loan") to the Purchasers, Omnisoft, Inc., a Delaware corporation and CrowdPay.us, Inc., a New York corporation, each of Omnisoft and Crowdpay being affiliates of the Company's majority stockholder, which obligations are guaranteed by the Company (collectively with the Borrowers, the "Loan Parties"), under the Loan and Security Agreement (the "Credit Agreement"), dated as of April 9, 2018, by and among the Loan Parties, the lenders from time to time party thereto as lenders (the "Lenders") and the Agent. The Term Loan matures in full on April 9, 2021, the third anniversary of the Closing. $1,000,000 of the principal amount under the Term Loan must be repaid on or prior to July 15, 2018, and an additional $2,000,000 in principal due on or prior to October 31, 2018 (in each case subject to earlier repayment under certain circumstances, including if a Loan Party consummates an equity financing), with the remaining principal due upon maturity. The Term Loan can be prepaid without penalty in part by the Loan Parties with ten days' prior written notice to the Agent, and in full within thirty days' prior written notice. The Term Loan is subject to an interest rate of 9.0% per annum, payable monthly in arrears. The obligations of the Loan Parties under the Credit Agreement are secured by all of their respective assets and the Loan Parties pledged all of their assets as collateral for their obligations under the Credit Agreement. Additionally, the Company pledged its ownership interests in the Purchasers and any of its other subsidiaries that it may form or acquire from time to time. The Credit Agreement includes customary representations, warranties and financial and other covenants of the Loan Parties for the benefit of the Lenders and the Agent. The obligations of the Loan Parties under the Credit Agreement are subject to customary events of default for a secured term loan. Each Loan Party is jointly and severally liable for the obligations under the Credit Agreement. On July 30, 2018, the Company entered into Amendment No. 1 to the Loan and Security Agreement (the "Amendment") amending that certain Loan and Security Agreement, dated as of April 9, 2018 (the "Original Credit Agreement," and as amended by the Amendment, the "Credit Agreement"), by and among GACP Finance Co., LLC, as administrative agent and collateral agent, the lenders party thereto, Securus365, Inc., eVance, Inc., eVance Capital, Inc., OMNISOFT, Inc., and Crowdpay.us, Inc., as borrowers, and the Company, as parent guarantor. Pursuant to the Amendment, among other things, the lenders (i) waived the Company's existing defaults under the Original Credit Agreement for its failure to make payment of $1,000,000 (the "initial payment") under the Original Credit Agreement on or prior to July 15, 2018 and to deliver to the lenders unaudited monthly financial statements and compliance certificates of the Company, (ii) extended the date on which the initial payment was required to be made to July 30, 2018 and extended the date on which the Company is required to provide audited financial statements for the fiscal years ended December 31, 2017 and 2018, (iii) permitted the Company to enter into a subordinated loan arrangement for the Note concurrently with the Amendment such that the Company could make the initial payment under the terms of the Credit Agreement, and permitted the Note to be repaid either from the sale of the Note Collateral Shares or at any time after the second payment under the Credit Agreement. The Company borrowed $1,000,000 from a related party (Note 11) in order to make its first scheduled payment. On November 14, 2018, the $2,000,000 second payment due under the Original Credit Agreement that was due by October 31, 2018 was paid. The Company borrowed $2,000,000 from a related party (Note 11) in order to make its second scheduled payment. Total interest expense for the GACP loan incurred during the year ended December 31, 2018 was $791,625, $73,625 of which is accrued as of December 31, 2018. On February 5, 2019, the Company entered into Amendment No. 3 to Loan and Security Agreement (the "Amendment") amending that certain Loan and Security Agreement, dated as of April 9, 2018 (the "Original Credit Agreement," and as amended, including by the Amendment, the "Credit Agreement"), by and among GACP Finance Co., LLC, as administrative agent and collateral agent, the lenders party thereto, Securus365, Inc., eVance, Inc., eVance Capital, Inc., OMNISOFT, Inc., and Crowdpay.us, Inc., as borrowers, and the Company, as parent guarantor. Pursuant to the Amendment, among other things, the lenders waived the Company's existing default under the Original Credit Agreement for its failure to comply with certain financial covenants set forth in the Original Credit Agreement and the parties amended the terms of the financial covenants that the Company must comply with. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2018 | |
Warrants [Abstract] | |
WARRANTS | NOTE 10 – WARRANTS Pursuant to and as additional consideration for the Term Loan under the Credit Agreement, on April 9, 2018 the Company issued to GACP a Warrant to purchase 1,200,000 shares of common stock of the Company at an exercise price of $0.25 per share, subject to adjustment as set forth in the Warrant. The Warrant is exercisable by GACP at any time from the Issuance Date until the later of (i) the third (3 rd rd As additional consideration for the Term Loan under the Credit Agreement, on April 9, 2018 the Company also entered into a letter agreement (the “Additional Warrants Agreement”) with GACP, pursuant to which the Company agreed that if the Company at any time after the Closing and prior to the satisfaction of all outstanding obligations under the Credit Agreement requests for GACP to provide debt financing for the acquisition of a company or operating business by the Company or its subsidiaries, and GACP or its affiliates provide all of the debt financing for such acquisition, the Company will issue to GACP a warrant to purchase 200,000 shares of the Company’s common stock (an “Additional Warrant”) upon the closing of such debt-financing, with such Additional Warrant in substantially the same form as the Warrant, up to a total of four (4) Additional Warrants for four debt-financed acquisitions under the Additional Warrants Agreement. The exercise price of the Additional Warrants, if issued, will be $0.30 per share for the first Additional Warrant, $0.35 per share for the second Additional Warrant, $0.40 per share for the third Additional Warrant and $0.45 per share for the fourth Additional Warrant, with the number of shares and exercise price subject to adjustment as set forth in the Additional Warrants Agreement and the Additional Warrant. The warrants have an exercise price of $0.25 and expire in three years. The aggregate fair value of the warrants, which was charged to interest expense, totaled $7,660 based on the Black Scholes Merton pricing model using the following estimates: exercise price of $0.25, 2.28% risk free rate, 114.11% volatility and expected life of the warrants of 3 years. A summary of the status of the Company’s outstanding stock warrants and changes during the year is presented below: Shares available to purchase with warrants Weighted Weighted Aggregate Intrinsic Value Outstanding, December 31, 2017 - $ - $ - Issued 1,200,000 $ 0.25 $ 0.0064 Exercised - $ - $ - Forfeited - $ - $ - Expired - $ - $ - Outstanding, December 31, 2018 1,200,000 $ 0.25 $ 0. 0064 $ - Exercisable, December 31, 2018 1,200,000 $ 0.25 $ 0. 0064 $ - Range of Exercise Prices Number Outstanding 12/31/2018 Weighted Average Remaining Contractual Life Weighted Average Exercise Price $0.25 1,200,000 2.27 years $0. 0064 The aggregate intrinsic value represents the total pretax intrinsic value, based on warrants with an exercise price less than the Company’s stock price as of December 31, 2018, which would have been received by the warrant holder had the warrant holder exercised their warrants as of that date. |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2018 | |
Stock Options | |
STOCK OPTIONS | NOTE 11 – STOCK OPTIONS On April 10, 2018, the Company entered into an employment agreement with its VP of Finance pursuant to which he was granted 7,955,168 common stock options. The grant shall vest at the rate of 1/5 beginning on each anniversary of the effective date of grant. The options have an exercise price of $0.0001 and expire in three years after each vest date. The aggregate fair value of the options totaled $1,192,535 based on the Black Scholes Merton pricing model using the following estimates: exercise price of $0.0001, 2.43% risk free rate, 123.7% volatility and expected life of the options of 5 years. The fair value is being amortized over the applicable vesting period and credited to additional paid in capital. Pursuant to the terms on the employment agreement with Mr. Yakov he was granted 200,000 common stock options. The grant shall vest at the rate of 1/3 beginning on each anniversary of the effective date of grant. The options have an exercise price of $0.001 and expire in three years after each vest date. The aggregate fair value of the options totaled $39,812 based on the Black Scholes Merton pricing model using the following estimates: exercise price of $0.001, 2.13% risk free rate, 123.7% volatility and expected life of the options of 4 years. The fair value is being amortized over the applicable vesting period and credited to additional paid in capital. For the year ended Stock Options Shares Weighted Average Exercise Price Options outstanding at January 1 - $ - Granted 8,155,168 $ 0.0001 Exercised - $ - Forfeited - $ - Options outstanding December 31 8,155,168 $ 0.0001 Shares exercisable at December 31 - $ - |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 – RELATED PARTY TRANSACTIONS On December 31, 2017, the Company converted $380,502 of accrued salary due to the CEO into 3,805,017 shares of common stock. On December 31, 2017, the Company issued 25,000 shares of common stock to its CFO for accounting services previously rendered. The shares were valued at $0.10 per shares for total non-cash expense of $2,500. On March 12, 2018, the Company received $30,000 from Mr. John Herzog. The advance was used for operating expenses, was unsecured, non interest bearing and due on demand. This was repaid in full on April 19, 2018. On July 30, 2018, pursuant to the terms of the Amendment (Note 8), the Company issued to Mr. John Herzog, a significant stockholder of the Company a subordinated promissory note in the principal amount of $1,000,000 (the “Note”) for cash proceeds of $1,000,000. The Note initially matured on March 31, 2019 (though the Company has the right to prepay the Note, in whole or in part, at any time prior to maturity) and bears interest at a rate of 12% per annum, compounding annually. The Note is subordinated to the Credit Agreement. The Company used the proceeds received to make the initial payment under the Credit Agreement. On November 14, 2018, the Company issued to Mr. Herzog a subordinated promissory note (“Note 2”) in the principal amount of $2,000,000 for cash proceeds of $2,000,000. On March 1, 2019, the Company entered into Amendment No. 1 to Subordinated Promissory Note (the “ Subordinated Note Amendment ”) with Mr. Herzog. The purpose of the Subordinated Note Amendment was to amend that certain subordinated promissory note issued on July 26, 2018 in the principal amount of $1,000,000 to reflect an increase in the amount of principal due under the note from $1,000,000 to $3,000,000 reflecting a payment made by the payee to the Company of $2,000,000 on November 14, 2018 (the proceeds of which were used by the Company to make a second required payment under the Credit Agreement) and to extend the maturity date of the Note from March 31, 2019 to September 30, 2020. Total interest expense on the two loans from Mr. Herzog for 2018 was $82,849, of which $52,849 is accrued as of December 31, 2018. As of December 31, 2018 and 2017, the Company has total accrued compensation due to Mr. Yakov of $568,292 and $394,927, respectively, and advances to be repaid to Mr. Yakov of $17,684 and $18,366, respectively. On August 10, 2018, Ronny Yakov, the CEO, loaned the Company $25,000, in order to pay for audit services. The loan is unsecured, bears interest at 12% and is due on demand. As of December 31, 2018, there is $1,184 of interest accrued on this note. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2018 | |
Preferred Stock | |
PREFERRED STOCK | NOTE 13 – PREFERRED STOCK Our certificate of incorporation authorizes the issuance of 50,000,000 shares of blank check preferred stock with such designation, rights and preferences as may be determined from time to time by our board of directors. No shares of preferred stock are currently issued or outstanding. Accordingly, our board of directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, redemption, voting or other rights which could adversely affect the voting power or other rights of the holders of common stock. We may issue some or all of the preferred stock to effect a business transaction. In addition, the preferred stock could be utilized as a method of discouraging, delaying or preventing a change in control of us. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
COMMON STOCK | NOTE 14 – COMMON STOCK On April 12, 2018, the Company issued 25,000 shares of common stock for services previously rendered for total non-cash expense of $3,750. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15 – COMMITMENTS AND CONTINGENCIES In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements. On October 20, 2017, the Company entered into a new employment agreement with its founder and president for 7 years effective January 1, 2018 through December 31, 2024. The agreement provides for an annual salary of $375,000, fringe benefits ($2,500 monthly automobile allowance, any benefit plans of the Company and 4 weeks paid vacation), an incentive bonus of $200,000 based on the achievement of certain performance criteria and an acquisition bonus equal to two (2%) percent of the gross purchase price paid in connection therewith upon the closing of any acquisition directly or indirectly by the Company or its subsidiaries during the Employment Period of any company or business (including purchases of all or substantially all of the assets of any such entity) having then existing sales of not less than three million five hundred thousand dollars ($3,500,000). As of December 31, 2018, no bonuses have been paid or accrued. Office Lease The Company leases its Georgia office facilities under an operating lease expiring in November 2019. Monthly lease payments range from $8,278 to $9,046 throughout the term of the lease. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 16 – INCOME TAX Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The income tax provision (benefit) consist of the following: For the Years Ended 2018 2017 Federal: Current $ - $ - Deferred - - State and local: Current - - Deferred - - On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law by the President of the United States. TCJA is a tax reform act that among other things, reduced corporate tax rates to 21 percent effective January 1, 2018. We have recorded a provisional decrease of $701,000, with a corresponding adjustment to valuation allowance of $701,000 as of December 31, 2017. No additional adjustments were made for the year ended December 31, 2018. Net deferred tax assets consist of the following components as of December 31: 2018 2017 Deferred Tax Assets: NOL Carryover $ 944,000 $ 818,000 Payroll accrual 9,000 - Allowance for Doubtful Accounts 12,000 - Related party accrual 213,000 - Less valuation allowance (1,178,000 ) (818,000 ) Net deferred tax assets $ - $ - The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the period ended December 31, due to the following: 2018 2017 Book loss $ (292,600 ) $ (125,000 ) State taxes (138,500 ) Meals and entertainment 6,800 3,800 Stock options 60,000 Other nondeductible expenses 4,300 125,000 Valuation allowance 360,000 (3,800 ) $ - $ - At December 31, 2018, the Company had net federal and state net operating loss carry forwards of approximately $3,803,000 and $847,000, respectively, which may be offset against future taxable income from the year 2019 to 2038. In accordance with Section 382 of the Internal Revenue code, the usage of the Company's net operating loss carryforwards may be limited in the event of a change in ownership. A full Section 382 analysis has not been prepared and NOLs could be subject to limitation under Section 382. The Company's policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. No interest or penalties were recorded during the years ended December 31, 2018 and 2017. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position in the next twelve months. The Company files income tax returns in the U.S. federal jurisdiction, New York and Georgia which remain subject to examination by the various taxing authorities beginning with the tax year ended December 31, 2015 (or the tax year ended December 31, 2001 if the Company were to utilize its NOLs). No tax audits were commenced or were in process during the years ended December 31, 2018 and 2017. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS Pursuant to the terms on the employment agreement with Mr. Yakov, he was granted 200,000 common stock options on January 1, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. 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 date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s accounting estimates include the collectability of receivables, useful lives of long lived assets and recoverability of those assets, valuation allowances for income taxes, stock based compensation and estimates made for business combinations. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, eVance, Securus, Crowdpay.US, and OMNISOFT, Inc. All significant intercompany transactions and balances have been eliminated. |
Segments | Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision–making group in deciding how to allocate resources and in assessing performance. Our chief operating decision–making group is composed of the chief executive officer. We currently operate in one segment surrounding our ISO operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less as cash and cash equivalents. The carrying amount of financial instruments included in cash and cash equivalents approximates fair value because of the short maturities for the instruments held. The Company had no cash equivalents as of December 31, 2018 and 2017. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company’s cash is deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount. |
Accounts Receivable | Accounts Receivable Accounts receivable represent contractual residual payments due from the Company’s processing partners or other customers. Residual payments are determined based on transaction fees and revenues from the credit and debit card processing activity of merchants for which the Company’s processing partners pay the Company. Based on collection experience and periodic reviews of outstanding receivables, management considers all accounts receivable for our residual payments to be fully collectible and accordingly, no allowance for doubtful accounts is required; however, Crowdpay has a recorded an allowance of $38,113 and $0, as of December 31, 2018 and 2017, respectively. |
Reserve for Chargeback Losses | Reserve for Chargeback Losses Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged to the merchant. If the merchant has inadequate funds, the Company must bear the credit risk for the full amount of the transaction. The Company evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly. For the years ended December 31, 2018 and 2017, respectively, chargebacks were immaterial. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are amortized over the lesser of the remaining term of the lease or the estimated useful life of the asset. Expenditures for repairs and maintenance are expensed as incurred. |
Impairment of Long–Lived Assets | Impairment of Long–Lived Assets The Company periodically reviews the carrying value of its long-lived assets held and used at least annually or when events and circumstances warrant such a review. If significant events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. Cash flow projections are sometimes based on a group of assets, rather than a single asset. If cash flows cannot be separately and independently identified for a single asset, the Company determines whether impairment has occurred for the group of assets for which it can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, it measures any impairment by comparing the fair value of the asset group to its carrying value. If the fair value of an asset or asset group is determined to be less than the carrying amount of the asset or asset group, impairment in the amount of the difference is recorded. |
Merchant Portfolios | Merchant Portfolios Merchant portfolios are valued at fair value of merchant customers on the date of acquisition and are amortized over their estimated useful lives (7 years). |
Goodwill | Goodwill The Company accounts for business combinations under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. The Company tests for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. In accordance with its policies, the Company performed a qualitative assessment of indefinite lived intangibles and goodwill at December 31, 2018 and determined there was no impairment of indefinite lived intangibles and goodwill. For the year ended December 31, 2017, during the annual assessment of goodwill, management determined that goodwill had been fully impaired. Due to this impairment the Company recorded an impairment charge of $7.9 million. The impairment charge resulted from the default of the loan with GACP Finance Co. LLC. |
Business Combinations | Business Combinations Acquisitions are accounted for using the acquisition method of accounting. The purchase price of an acquisition is allocated to the assets acquired and liabilities assumed using the estimated fair values at the acquisition date. Transaction costs are expensed as incurred. The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired and identified based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. |
Stock-based Compensation | Stock-based Compensation We account for equity-based transactions with nonemployees under the provisions of ASC Topic No. 505-50, Equity-Based Payments to Non-Employees We account for employee stock-based compensation in accordance with the guidance of Financial Accounting Standards Board (“FASB”) ASC Topic 718, Compensation—Stock Compensation, |
Net Loss per Share | Net Loss per Share Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares for the year ended December 31, 2018 does not include warrants to acquire 1,200,000 shares of common stock because of their anti-dilutive effect. There were no potentially dilutive shares as of December 31, 2017. |
Revenue Recognition and Cost of Revenues | Revenue Recognition and Cost of Revenues The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. In the case of “wholesale” residual revenue in which the Company has a direct contractual relationship with the merchant, bears risk of chargebacks and performs underwriting on the merchants, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees as expenses. In cases of residual revenue where the Company is not responsible for merchant underwriting and has no chargeback liability and has no or limited contractual relationship with the merchant, the Company records the amount it receives from the processor net of interchange and other processing fees as revenue. |
Income Taxes | Income Taxes Income taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to tax net operating loss carryforwards. The deferred tax assets and liabilities represent the future tax return consequences of these differences, which will either be taxable or deductible when assets and liabilities are recovered or settled, as well as operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established against deferred tax assets when in the judgment of management, it is more likely than not that such deferred tax assets will not become available. Because the judgment about the level of future taxable income is dependent to a great extent on matters that may, at least in part, be beyond the Company’s control, it is at least reasonably possible that management’s judgment about the need for a valuation allowance for deferred taxes could change in the near term. Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of December 31, 2018, and 2017, no liability for unrecognized tax benefits was required to be reported. |
Fair Value Measurements | Fair Value Measurements Fair value is defined 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 No. 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as described below: Level 1: Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly. Level 2 inputs include quoted prices for similar assets, quoted prices in markets that are not considered to be active, and observable inputs other than quoted prices such as interest rates. Level 3: Level 3 inputs are unobservable inputs. The following required disclosure of the estimated fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The methods and assumptions used to estimate the fair values of each class of financial instruments are as follows: Cash and Cash Equivalents, Accounts Receivable, and Accounts Payable. The items are generally short-term in nature, and accordingly, the carrying amounts reported on the consolidated balance sheets are reasonable approximations of their fair values. The carrying amounts of Notes Receivable and Notes Payable approximate the fair value as the notes bear interest rates that are consistent with current market rates. |
Subsequent Events | Subsequent Events Management evaluates events that have occurred after the balance sheet date and through the date the financial statements are issued. Based upon the review, management did not identify any recognized or non-recognized subsequent events which would have required an adjustment or disclosure in the financial statements, except as described in Note 17. Subsequent Events |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Clarification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which eliminates the diversity in practice related to classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years and early adoption is permitted, including adoption in an interim period. The adoption of this ASU has had no material impact on the Company’s consolidated financial statements and disclosures. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350) In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception Earnings Per Share |
Recent Accounting Standards | Recent Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers, to establish ASC Topic 606, (ASC 606). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition and most industry-specific guidance throughout the Industry Topics of the Codification. The core principle of the guidance 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. The guidance includes a five-step framework that requires an entity to: (i) identify the 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 revenue when the entity satisfies a performance obligation. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date, which amended the effective date for nonpublic entities to annual reporting periods beginning after December 15, 2018. In March 2016, the FASB issued an update (ASU 2016-08) to ASC 606, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the guidance on principal versus agent considerations. In April 2016, the FASB issued an update (ASU 2016-10) to ASC 606, Identifying Performance Obligations and Licensing, which provides clarification related to identifying performance obligations and licensing implementation guidance under ASU 2014-09. In May 2016, the FASB issued an update (ASU 2016-12) to ASC 606, Narrow-Scope Improvements and Practical Expedients, which amends guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. In December 2016, the FASB issued an update (ASU 2016-20) to ASC 606, Technical Corrections and Improvements, which outlines technical corrections to certain aspects of the new revenue recognition standard such as provisions for losses on construction type contracts and disclosure of remaining performance obligations, among other aspects. The effective date and transition requirements are the same as those in ASU 2014-09 for all subsequent clarifying guidance discussed herein. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company has elected to apply the modified retrospective method. Accordingly, the new revenue standard will be applied prospectively in the Company’s financial statements from January 1, 2019 forward and reported financial information for historical comparable periods will not be revised and will continue to be reported under the accounting standards in effect during those historical periods. The Company has reviewed other recently issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any other pronouncements to have an impact on its results of operations or financial position. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | December 31 December 31, 2017 2018 2017 Predecessor Furniture and Fixtures $ 14,895 $ - $ 36,471 Office Equipment 73,205 - 180,576 Leasehold improvements 6,208 - - Computer Software 12,292 - 63,607 106,600 - 280,654 Accumulated depreciation (40,655 ) - (162,414 ) Property and equipment, net $ 65,945 $ - $ 118,240 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of other assets | December 31 December 31, 2017 2018 2017 Predecessor Merchant Portfolios $ 2,190,000 $ - $ 2,540,690 Less Accumulated Amortization (208,571 ) - (756,158 ) Net residual portfolios $ 1,981,429 $ - $ 1,784,532 |
Schedule of estimated amortization expense related to amortizing intangible assets | 2019 $ 812,857 2020 $ 812,857 2021 $ 812,857 2022 $ 812,857 2023 $ 479,524 Thereafter $ 417,144 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of estimated fair market values of the assets acquired and liabilities | Consideration Consideration issued $ 12,500,000 Identified assets and liabilities Cash 42,711 Accounts and other receivables 480,302 Note receivable 174,967 Prepaid expenses 84,945 Long-term assets 348,367 Property and equipment 106,600 Accounts payable (180,231 ) Accrued Expenses (105,877 ) Merchant portfolios 2,190,000 Tradename 2,500,000 Total identified assets and liabilities 5,641,784 Excess purchase price allocated to goodwill $ 6,858,216 |
Schedule of unaudited pro forma results of operations | 2018 2017 Revenues $ 12,194,415 $ 15,091,707 Operating loss $ (124,442 ) $ (3,023,848 ) Net loss $ (1,816,576 ) $ (6,979,090 ) Net loss per share – basic and diluted $ (0.01 ) $ (0.04 ) |
Common Control Mergers (Tables)
Common Control Mergers (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Omnisoft [Member] | |
Schedule of common control merger as of the earliest date presented in these consolidated financial statements | Accounts receivable $ 250 Accounts payable (602 ) Accrued expenses – related party (265,319 ) Net liabilities assumed $ (265,671 ) |
Schedule of consolidated statement of operations | Revenue $ 250 Operating expenses (134,154 ) Net loss $ (133,904 ) |
Crowdpay [Member] | |
Schedule of common control merger as of the earliest date presented in these consolidated financial statements | Accounts receivable $ 27,540 Other receivable – related party 1,705 Accounts payable and accrued expenses (48,472 ) Accrued expenses – related party (149,645 ) Net liabilities assumed $ (168,872 ) |
Schedule of consolidated statement of operations | Revenue $ 132,205 Operating expenses (261,860 ) Net loss $ (129,655 ) |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Warrants [Abstract] | |
Schedule of outstanding stock warrants | Shares available to purchase with warrants Weighted Weighted Aggregate Intrinsic Value Outstanding, December 31, 2017 - $ - $ - Issued 1,200,000 $ 0.25 $ 0.0064 Exercised - $ - $ - Forfeited - $ - $ - Expired - $ - $ - Outstanding, December 31, 2018 1,200,000 $ 0.25 $ 0. 0064 $ - Exercisable, December 31, 2018 1,200,000 $ 0.25 $ 0. 0064 $ - Range of Exercise Prices Number Outstanding 12/31/2018 Weighted Average Remaining Contractual Life Weighted Average Exercise Price $0.25 1,200,000 2.27 years $0. 25 |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock Options | |
Schedule of stock option activity | For the year ended Stock Options Shares Weighted Average Exercise Price Options outstanding at January 1 - $ - Granted 8,155,168 $ 0.0001 Exercised - $ - Forfeited - $ - Options outstanding December 31 8,155,168 $ 0.0001 Shares exercisable at December 31 - $ - |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision (benefit) | For the Years Ended 2018 2017 Federal: Current $ - $ - Deferred - - State and local: Current - - Deferred - - |
Schedule of net deferred tax assets | 2018 2017 Deferred Tax Assets: NOL Carryover $ 944,000 $ 818,000 Payroll accrual 9,000 - Allowance for Doubtful Accounts 12,000 - Related party accrual 213,000 - Less valuation allowance (1,178,000 ) (818,000 ) Net deferred tax assets $ - $ - |
Schedule of income tax provision | 2018 2017 Book loss $ (292,600 ) $ (125,000 ) State taxes (138,500 ) Meals and entertainment 6,800 3,800 Stock options 60,000 Other nondeductible expenses 4,300 125,000 Valuation allowance 360,000 (3,800 ) $ - $ - |
Background and Recent Acquisi_2
Background and Recent Acquisitions (Details) - USD ($) | May 09, 2018 | Dec. 31, 2018 |
Description of acquired assets | Post-Closing obligations under assigned contracts and paid to GACP the sum of $12,500,000, through the deemed simultaneous financing of such purchase price to the Purchasers under the Credit Agreement. | |
Crowdpay [Member] | ||
Shares of common stock will issued | 87,500,000 | |
OMNISOFT [Member] | ||
Shares of common stock will issued | 55,000,000 | |
Maximum [Member] | ||
Capital raise | $ 50,000,000 | |
Minimum [Member] | ||
Capital raise | $ 10,000,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of Significant Accounting Policies (Textual) | ||
Weighted average number of common shares anti-dilutive effect | 1,200,000 | |
Property and equipment, estimated useful lives, description | Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. | |
Acquisition over estimated useful lives, description | Residual portfolios are valued at fair value on the date of acquisition and are amortized over their estimated useful lives (7 years). | |
Allowance for doubtful accounts | $ 38,113 | $ 0 |
Liquidity and Capital Resourc_2
Liquidity and Capital Resources (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Liquidity and Capital Resources (Textual) | ||
Cssh | $ 111,586 | |
Working capital deficit | 649,203 | |
Net loss | (1,393,544) | $ (662,297) |
Cash used in operating activities | (131,092) | $ (54,660) |
Accrued payroll and other expenses | $ 610,976 |
Note Receivable (Details)
Note Receivable (Details) - USD ($) | Nov. 30, 2017 | Apr. 08, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 15, 2018 | May 15, 2018 | Apr. 15, 2018 | Mar. 15, 2018 | Feb. 15, 2018 | Jan. 15, 2018 |
Note Receivable | ||||||||||
Note payable | $ 675,000 | |||||||||
Principal amount | 200,000 | $ 475,000 | $ 475,000 | $ 475,000 | $ 475,000 | $ 475,000 | $ 475,000 | |||
Bad debt expense | $ 117,670 | $ 38,113 | ||||||||
Note receivable | $ 357,330 | |||||||||
Business combination, description | The predecessor collected $182,362 and subsequent to the date the Company completed the business combination (Note 7), the Company collected the remaining $174,967. |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Property and equipment, net | $ 65,945 | |
Successor [Member] | ||
Property and equipment, gross | 106,600 | |
Accumulated depreciation | (40,655) | |
Predecessor [Member] | ||
Property and equipment, gross | 280,654 | |
Accumulated depreciation | (162,414) | |
Property and equipment, net | 118,240 | |
Computer Software [Member] | Successor [Member] | ||
Property and equipment, gross | 12,292 | |
Computer Software [Member] | Predecessor [Member] | ||
Property and equipment, gross | 63,607 | |
Furniture and Fixtures [Member] | Successor [Member] | ||
Property and equipment, gross | 14,895 | |
Furniture and Fixtures [Member] | Predecessor [Member] | ||
Property and equipment, gross | 36,471 | |
Office Equipment [Member] | Successor [Member] | ||
Property and equipment, gross | 73,205 | |
Office Equipment [Member] | Predecessor [Member] | ||
Property and equipment, gross | 180,576 | |
Leasehold improvements [Member] | Successor [Member] | ||
Property and equipment, gross | $ 6,208 | |
Leasehold improvements [Member] | Predecessor [Member] | ||
Property and equipment, gross |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | |
Apr. 08, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Predecessor [Member] | |||
Property and Equipment (Textual) | |||
Depreciation expense | $ 18,486 | $ 83,569 | |
Property, Plant and Equipment [Member] | |||
Property and Equipment (Textual) | |||
Depreciation expense | $ 40,655 | $ 0 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Merchant Portfolios | $ 2,190,000 | |
Less Accumulated Amortization | (208,571) | |
Residual Portfolios, net | 1,981,429 | |
Trade name | 2,500,000 | |
Less Accumulated Amortization | (333,333) | |
Net trade name | $ 2,166,667 | |
Predecessor [Member] | ||
Merchant Portfolios | 2,540,690 | |
Less Accumulated Amortization | (756,158) | |
Residual Portfolios, net | 1,784,532 | |
Trade name | ||
Less Accumulated Amortization | ||
Net trade name |
Intangible Assets (Details 1)
Intangible Assets (Details 1) | Dec. 31, 2018USD ($) |
Intangible Assets | |
2019 | $ 812,857 |
2020 | 812,857 |
2021 | 812,857 |
2022 | 812,857 |
2023 | 479,524 |
Thereafter | $ 417,144 |
Intangible Assets (Details Text
Intangible Assets (Details Textuals) - USD ($) | 3 Months Ended | 12 Months Ended | |
Apr. 08, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amortization expense | $ 541,904 | ||
Predecessor [Member] | |||
Amortized useful lives | 7 years | 5 years | |
Weighted average useful life of amortizing intangible assets | 6 years | ||
Amortization expense | $ 90,739 | $ 362,956 |
Business Combinations (Details)
Business Combinations (Details) - GACP [Member] | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Consideration | |
Consideration issued | $ 12,500,000 |
Identified assets and liabilities | |
Cash | 42,711 |
Accounts and other receivables | 480,302 |
Note receivable | 174,967 |
Prepaid expenses | 84,945 |
Long-term assets | 348,367 |
Property and equipment | 106,600 |
Accounts payable | (180,231) |
Accrued Expenses | (105,877) |
Merchant portfolios | 2,190,000 |
Tradename | 2,500,000 |
Total identified assets and liabilities | 5,641,784 |
Excess purchase price allocated to goodwill | $ 6,858,216 |
Business Combinations (Details
Business Combinations (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Combination Details 1Abstract | ||
Revenues | $ 12,194,415 | $ 15,091,707 |
Operating loss | (124,442) | (3,023,848) |
Net income (loss) | $ (1,816,576) | $ (6,979,090) |
Net loss applicable to common stockholders | $ (0.01) | $ (0.04) |
Business Combinations (Detail_2
Business Combinations (Details Textual) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combination (Textual) | |
Description of acquired assets | Post-Closing obligations under assigned contracts and paid to GACP the sum of $12,500,000, through the deemed simultaneous financing of such purchase price to the Purchasers under the Credit Agreement. |
Common Control Mergers (Details
Common Control Mergers (Details) | Jan. 01, 2017USD ($) |
Omnisoft [Member] | |
Accounts receivable | $ 250 |
Accounts payable | (602) |
Accrued expenses - related party | (265,319) |
Net liabilities assumed | (265,671) |
Crowdpay [Member] | |
Accounts receivable | 27,540 |
Other receivable - related party | 1,705 |
Accounts payable and accrued expenses | (48,472) |
Accrued expenses - related party | (149,645) |
Net liabilities assumed | $ (168,872) |
Common Control Mergers (Detai_2
Common Control Mergers (Details 1) | Jan. 01, 2017USD ($) |
Omnisoft [Member] | |
Revenue | $ 250 |
Operating expenses | (134,154) |
Net Loss | (133,904) |
Crowdpay [Member] | |
Revenue | 132,205 |
Operating expenses | (261,860) |
Net Loss | $ (129,655) |
Common Control Mergers (Detai_3
Common Control Mergers (Details Textuals) | 1 Months Ended |
May 09, 2018shares | |
OMNISOFT [Member] | |
Acquired interest rate | 100.00% |
Issuance of common shares | 55,000,000 |
Crowdpay [Member] | |
Acquired interest rate | 100.00% |
Issuance of common shares | 87,500,000 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Nov. 14, 2018 | Jul. 15, 2018 | Jul. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2018 | Jun. 15, 2018 | May 15, 2018 | Apr. 15, 2018 | Mar. 15, 2018 | Feb. 15, 2018 | Jan. 15, 2018 | Nov. 30, 2017 |
Term loan, description | 1000000 | |||||||||||||
Term loan, principal amount | $ 475,000 | $ 475,000 | $ 475,000 | $ 475,000 | $ 475,000 | $ 475,000 | $ 200,000 | |||||||
Loan and security agreement, description | (i) waived the Company's existing defaults under the Original Credit Agreement for its failure to make payment of $1,000,000 (the "initial payment") under the Original Credit Agreement on or prior to July 15, 2018 and to deliver to the lenders unaudited monthly financial statements and compliance certificates of the Company, (ii) extended the date on which the initial payment was required to be made to July 30, 2018 and extended the date on which the Company is required to provide audited financial statements for the fiscal years ended December 31, 2017 and 2018, (iii) permitted the Company to enter into a subordinated loan arrangement for the Note concurrently with the Amendment such that the Company could make the initial payment under the terms of the Credit Agreement, and permitted the Note to be repaid either from the sale of the Note Collateral Shares or at any time after the second payment under the Credit Agreement. The Company borrowed $1,000,000 from a related party (Note 11) in order to make its first scheduled payment. | |||||||||||||
Amortization expense | $ 541,904 | |||||||||||||
Company borrowed | 3,055,000 | 53,500 | ||||||||||||
Interest expenses | $ 73,625 | |||||||||||||
Notes Payable [Member] | ||||||||||||||
Additional principal payment due | $ 2,000,000 | $ 2,000,000 | ||||||||||||
Loan of interest, percentage | 9.00% | |||||||||||||
Term loan, maturity date | Oct. 31, 2018 | Apr. 9, 2021 | ||||||||||||
Company borrowed | $ 2,000,000 | |||||||||||||
GACP Finance Co., LLC, [Member] | ||||||||||||||
Term loan, description | The initial sole lender thereunder, provided a term loan of $12,500,000 (the "Term Loan") to the Purchasers, Omnisoft, Inc., a Delaware corporation and CrowdPay.us, Inc., a New York corporation, each of Omnisoft and Crowdpay being affiliates of the Company's majority stockholder, which obligations are guaranteed by the Company (collectively with the Borrowers, the "Loan Parties"), under the Loan and Security Agreement (the "Credit Agreement"), dated as of April 9, 2018, by and among the Loan Parties, the lenders from time to time party thereto as lenders (the "Lenders") and the Agent | |||||||||||||
Additional principal payment due | $ 13,911,233 | $ 13,911,233 | ||||||||||||
Interest expenses | $ 791,625 | |||||||||||||
Notes payable , description | The Loan accrues interest of 18% per annum of which 13% is payable in cash monthly and 5% is payable in kind (PIK). |
Warrants (Details)
Warrants (Details) | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Shares available to purchase with warrants | |
Outstanding, December 31, 2017 | shares | |
Issued | shares | 1,200,000 |
Exercised | shares | |
Forfeited | shares | |
Expired | shares | |
Outstanding, December 31, 2018 | shares | 1,200,000 |
Exercisable, December 31, 2018 | shares | 1,200,000 |
Weighted Average Price | |
Outstanding, December 31, 2017 | |
Issued | 0.25 |
Exercised | |
Forfeited | |
Expired | |
Outstanding, December 31, 2018 | 0.25 |
Exercisable, December 31, 2018 | 0.25 |
Weighted Average Fair Value | |
Outstanding, December 31, 2017 | |
Issued | 0.0064 |
Exercised | |
Forfeited | |
Expired | |
Outstanding, December 31, 2018 | 0.0064 |
Exercisable, December 31, 2018 | $ 0.0064 |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Value | $ | |
Aggregate Intrinsic Value, exercisable | $ |
Warrants (Details 1)
Warrants (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Warrants [Abstract] | ||
Range of Exercise Prices | $ 0.25 | |
Number Outstanding | 1,200,000 | |
Weighted Average Remaining Contractual Life | 2 years 3 months 8 days | |
Weighted Average Exercise Price | $ 0.25 |
Warrants (Details Textual)
Warrants (Details Textual) - USD ($) | Apr. 09, 2018 | Dec. 31, 2018 |
Warrants (Textual) | ||
Exercise price | $ 0.25 | |
Warrants exercise price | 0.0001 | |
Common stock equals price | $ 5 | |
GACP Finance Co., LLC, [Member] | Warrants [Member] | ||
Warrants (Textual) | ||
Warrant to purchase shares of common stock | 1,200,000 | |
Exercise price | $ 0.25 | |
Expire | 3 years | |
Fair value of warrants | $ 7,660 | |
Risk free rate | 2.28% | |
Volatility | 114.11% | |
Expected life | 3 years | |
Additional Warrants Agreement [Member] | GACP Finance Co., LLC, [Member] | ||
Warrants (Textual) | ||
Warrants to purchase of common stock | 200,000 |
Stock Options (Details)
Stock Options (Details) - Equity Option [Member] | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Options outstanding, Shares | |
Granted, shares | 8,155,168 |
Exercised, shares | |
Forfeited, shares | |
Options outstanding, shares | 8,155,168 |
Shares exercisable, shares | |
Options outstanding, Weighted Average Exercise Price | $ / shares | |
Granted, Weighted Average Exercise Price | $ / shares | 0.0001 |
Options outstanding, Weighted Average Exercise Price | $ / shares | $ 0.0001 |
Stock Options (Details Textual)
Stock Options (Details Textual) | Apr. 10, 2018USD ($)$ / sharesshares |
Mr. Yakov [Member] | |
Options granted | shares | 200,000 |
Options exercise price | $ 0.001 |
Grant vest rate | The grant shall vest at the rate of 1/3 beginning on each anniversary of the effective date of grant. |
Aggregate fair value | $ | $ 39,812 |
Exercise price | $ 0.001 |
Risk free rate | 2.13% |
Volatility rate | 123.70% |
Expected life | 4 years |
VP [Member] | |
Options granted | shares | 7,955,168 |
Options exercise price | $ 0.001 |
Grant vest rate | The grant shall vest at the rate of 1/5 beginning on each anniversary of the effective date of grant. |
Aggregate fair value | $ | $ 1,192,535 |
Exercise price | $ 0.0001 |
Risk free rate | 2.43% |
Volatility rate | 123.70% |
Expected life | 5 years |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Nov. 14, 2018 | Aug. 10, 2018 | Mar. 12, 2018 | Jul. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 26, 2018 | Jun. 15, 2018 | May 15, 2018 | Apr. 15, 2018 | Mar. 15, 2018 | Feb. 15, 2018 | Jan. 15, 2018 | Nov. 30, 2017 | Oct. 20, 2017 |
Related Party Transactions (Textual) | |||||||||||||||
Principal amount | $ 475,000 | $ 475,000 | $ 475,000 | $ 475,000 | $ 475,000 | $ 475,000 | $ 200,000 | ||||||||
Accrued salary | $ 375,000 | ||||||||||||||
Common per share value | $ 0.0001 | $ 0.0001 | |||||||||||||
Non cash expense | $ 2,500 | ||||||||||||||
Total interest expense | $ 800,467 | ||||||||||||||
Accrued interest | 73,625 | ||||||||||||||
Note [Member] | Maximum [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Principal amount | $ 3,000,000 | ||||||||||||||
Note [Member] | Minimum [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Principal amount | 1,000,000 | ||||||||||||||
Chief Executive Officer [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Accrued salary | $ 380,502 | ||||||||||||||
Convertible debt converted into common shares | 3,805,017 | ||||||||||||||
Chief Financial Officer [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Issued shares of common stock | 25,000 | ||||||||||||||
Common per share value | $ 0.10 | ||||||||||||||
Ronny Yakov [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Borrowed from related party | $ 25,000 | ||||||||||||||
Related party transactions interest rate | 12.00% | ||||||||||||||
John Herzog [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Borrowed from related party | $ 30,000 | ||||||||||||||
Related party transactions interest rate | 12.00% | ||||||||||||||
Cash proceeds | $ 1,000,000 | ||||||||||||||
Herzog [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Principal amount | $ 2,000,000 | $ 1,000,000 | |||||||||||||
Accrued expenses due to related parties | 52,849 | ||||||||||||||
Reflecting payment | $ 2,000,000 | ||||||||||||||
Description of credit agreement | The maturity date of the Note from March 31, 2019 to September 30, 2020 | ||||||||||||||
Total interest expense | 82,849 | ||||||||||||||
Mr. Yakov [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Accrued compensation | 568,292 | $ 394,927 | |||||||||||||
Repaid advances | $ 17,684 | $ 18,366 |
Preferred Stock (Details)
Preferred Stock (Details) - shares | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred Stock Details Abstract | ||
Issuance of shares | 50,000,000 | 50,000,000 |
Common Stock (Details)
Common Stock (Details) - USD ($) | Apr. 12, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Common Stock (Textual) | |||
Non-cash expense | $ 2,500 | ||
Common Stock | |||
Common Stock (Textual) | |||
Issuance of common stock for services | 25,000 | 25,000 | 25,000 |
Non-cash expense | $ 3,750 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended |
Oct. 20, 2017 | Dec. 31, 2018 | |
Commitments and Contingencies (Textual) | ||
Employment agreement, description | The Company entered into a new employment agreement with its founder and president for 7 years effective January 1, 2018 through December 31, 2024. | |
Annual salary | $ 375,000 | |
Monthly automobile allowance | $ 2,500 | |
Paid vacation period | 28 days | |
Incentive bonus | $ 200,000 | |
Operating lease expiring | Nov. 30, 2019 | |
Minimum [Member] | ||
Commitments and Contingencies (Textual) | ||
Monthly lease payments | $ 8,278 | |
Maximum [Member] | ||
Commitments and Contingencies (Textual) | ||
Monthly lease payments | $ 9,046 |
Income Tax (Details)
Income Tax (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Federal: | ||
Current | ||
Deferred | ||
State and local: | ||
Current | ||
Deferred |
Income Tax (Details 1)
Income Tax (Details 1) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets: | ||
NOL Carryover | $ 944,000 | $ 818,000 |
Payroll accrual | 9,000 | |
Allowance for Doubtful Accounts | 12,000 | |
Related party accrual | 213,000 | |
Less valuation allowance | (1,178,000) | (818,000) |
Net deferred tax assets |
Income Tax (Details 2)
Income Tax (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Book loss | $ (292,600) | $ (125,000) |
State taxes | (138,500) | |
Meals and entertainment | 6,800 | 3,800 |
Stock options | 60,000 | |
Other nondeductible expenses | 4,300 | 125,000 |
Valuation allowance | 360,000 | (3,800) |
Income tax provision |
Income Tax (Details Textual)
Income Tax (Details Textual) - USD ($) | 1 Months Ended | ||
Dec. 22, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes (Textual) | |||
Net operating loss carry forwards | $ 3,803,000 | ||
Adjustment to valuation allowance | $ 1,178,000 | $ 818,000 | |
Tax Act [Member] | |||
Income Taxes (Textual) | |||
Valuation allowance change description | On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law by the President of the United States. TCJA is a tax reform act that among other things, reduced corporate tax rates to 21 percent effective January 1, 2018. | ||
Decrease in valuation allowance | $ 701,000 | ||
Adjustment to valuation allowance | $ 701,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Mr. Yakov [Member] - shares | Jan. 01, 2019 | Apr. 10, 2018 |
Subsequent Events (Textual) | ||
Granted common stock option | 200,000 | |
Subsequent Event [Member] | ||
Subsequent Events (Textual) | ||
Granted common stock option | 200,000 |