Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 31, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | Surge Holdings, Inc. | ||
Entity Central Index Key | 1,392,694 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 7,511,927 | ||
Entity Common Stock, Shares Outstanding | 79,796,679 | ||
Trading Symbol | SURG | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 215,843 | $ 63,709 |
Accounts receivable, less allowance for doubtful accounts of $17,000 and $17,000, respectively | 56,036 | 126,428 |
Prepaid expenses | 47,681 | 568,700 |
Total current assets | 319,560 | 758,837 |
Property and Equipment, less accumulated depreciation of $8,663 and $4,675, respectively | 157,444 | 14,432 |
Intangible assets less accumulated amortization of $282,723 and $167,449, respectively | 101,921 | 217,195 |
Goodwill | 866,782 | 866,782 |
Deposit on acquisition | 1,700,000 | 500,000 |
Total assets | 3,145,707 | 2,357,246 |
Current liabilities: | ||
Accounts payable and accrued expenses - others | 482,262 | 775,624 |
Related party | 13,044 | |
Credit card liability | 336,726 | 336,726 |
Deferred revenue | 130,000 | 165,000 |
Derivative liability | 92,897 | 584,168 |
Advance from related party | 389,502 | 356,502 |
Current portion of long-term debt - related party | 304,000 | 53,750 |
Notes payable and current portion of long-term debt, net of discount of $0 and $8,774, respectively | 738,035 | 1,788,124 |
Total current liabilities | 2,486,466 | 4,059,894 |
Long-term debt - related party | 53,750 | |
Long-term debt less current installments, net of discount of $0 and $87,379, respectively | 52,188 | 58,651 |
Total liabilities | 2,538,654 | 4,172,295 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Preferred stock: $0.001 par value; 100,000,000 shares authorized; 10,000,000 and no shares issued and outstanding at December 31, 2017 and 2016, respectively | 10,000 | 10,000 |
Common stock: $0.001 par value; 500,000,000 shares authorized; 90,057,445 shares and 57,343,901 shares issued and 88,275,445 and 57,343,901 outstanding at December 31, 2017 and December 31, 2016, respectively | 90,058 | 57,344 |
Additional paid in capital | 9,584,473 | 4,145,589 |
Less treasury stock at cost (1,782,000 shares) | (1,069,200) | |
Accumulated deficit | (8,008,278) | (6,027,982) |
Total stockholders' equity (deficit) | 607,053 | (1,815,049) |
Total liabilities and stockholders' equity (deficit) | $ 3,145,707 | $ 2,357,246 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 17,000 | $ 17,000 |
Accumulated depreciation of property and equipment | 8,663 | 4,675 |
Accumulated amortization of intangible assets | 282,723 | 167,449 |
Notes payable and long term debt net of discount current | 0 | 8,774 |
Long term debt net of discount | $ 0 | $ 87,379 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 10,000,000 | |
Preferred stock, shares outstanding | 10,000,000 | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 90,057,445 | 57,343,901 |
Common stock, shares outstanding | 88,275,445 | 57,343,901 |
Treasury Stock, shares | 1,782,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||
Revenue | $ 1,429,872 | $ 3,296,747 |
Cost of revenue | 733,033 | 2,328,467 |
Gross profit | 696,839 | 968,280 |
Costs and expenses | ||
Depreciation and amortization | 119,262 | 433,118 |
Asset impairment | 372,706 | |
Selling, general and administrative | 2,646,647 | 3,269,270 |
Total costs and expenses | 2,765,909 | 4,075,094 |
Operating loss | (2,069,070) | (3,106,814) |
Other income (expense): | ||
Interest expense | (416,959) | (1,660,338) |
Other income | 9,585 | 5,844 |
Change in fair value of derivatives | (504,201) | 268,236 |
Gain (loss) on debt extinguishment | 1,000,349 | (107,105) |
Total other income (expense) | 88,774 | (1,493,362) |
Net loss before provision for income taxes | (1,980,296) | (4,600,176) |
Provision for income taxes | ||
Net loss | $ (1,980,296) | $ (4,600,176) |
Net loss per common share, basic and diluted | $ (0.03) | $ (0.10) |
Weighted average common shares outstanding | 76,183,385 | 44,796,318 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2015 | $ 36,130 | $ 784,929 | $ (1,427,806) | $ (606,747) | ||
Balance, shares at Dec. 31, 2015 | 36,130,432 | |||||
Common stock issued for Cash | $ 8,750 | 848,750 | 857,500 | |||
Common stock issued for Cash, shares | 8,750,000 | |||||
Common stock issued for Services | $ 10,000 | $ 7,890 | 1,389,898 | 1,407,788 | ||
Common stock issued for Services, shares | 10,000,000 | 7,890,000 | ||||
Common stock issued for Loan Costs | $ 1,782 | 298,218 | 300,000 | |||
Common stock issued for Loan Costs, shares | 1,782,000 | |||||
Common stock issued for Convertible notes payable | $ 2,792 | 507,963 | 510,755 | |||
Common stock issued for Convertible notes payable, shares | 2,791,469 | |||||
Warrant issued for services | $ 389,698 | $ 389,698 | ||||
Option compensation | 301,133 | 301,133 | ||||
Measurement period adjustment | $ (375,000) | $ (375,000) | ||||
Net loss | (4,600,176) | (4,600,176) | ||||
Balance at Dec. 31, 2016 | $ 10,000 | $ 57,344 | 4,145,589 | (6,027,982) | (1,815,049) | |
Balance, shares at Dec. 31, 2016 | 10,000,000 | 57,343,901 | ||||
Common stock issued for Cash | $ 7,225 | 1,167,775 | 1,175,000 | |||
Common stock issued for Cash, shares | 7,225,000 | |||||
Common stock issued for Services | $ 3,665 | 936,508 | $ 940,173 | |||
Common stock issued for Services, shares | 3,665,000 | 3,665,000 | ||||
Common stock issued for Convertible notes payable | $ 9,824 | $ 1,906,617 | $ 1,916,441 | |||
Common stock issued for Convertible notes payable, shares | 9,823,544 | |||||
Option compensation | 239,984 | 239,984 | ||||
Deposit for acquisition | $ 12,000 | $ 1,188,000 | $ 1,200,000 | |||
Deposit for acquisition, shares | 12,000,000 | |||||
Treasury stock acquired | $ (1,069,200) | (1,069,200) | ||||
Treasury stock acquired, shares | 1,782,000 | |||||
Net loss | (1,980,296) | (1,980,296) | ||||
Balance at Dec. 31, 2017 | $ 10,000 | $ 90,058 | $ 9,584,473 | $ (8,008,278) | $ (1,069,200) | $ 607,053 |
Balance, shares at Dec. 31, 2017 | 10,000,000 | 90,057,445 | 1,782,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | ||
Net loss | $ (1,980,296) | $ (4,600,176) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization and depreciation | 119,262 | 433,118 |
Common stock issued for services | 1,701,176 | 1,531,380 |
Change in fair value of derivatives | 504,201 | (268,236) |
Gain (loss) on debt extinguishment | (1,000,349) | 107,105 |
Bad debt expense | 10,000 | 36,954 |
Non-cash interest | 288,110 | 1,466,550 |
Loan penalty | 30,000 | |
Asset impairment | 372,706 | |
Gain from accounts payable settlement | (9,585) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 60,392 | 111,711 |
Deferred revenue | (35,000) | (353,240) |
Accounts payable and accrued expenses | (262,020) | 427,660 |
Credit card liability | 62,591 | |
Net cash used in operating activities | (604,109) | (641,877) |
Investing activities | ||
Purchase of property and equipment | (147,000) | (3,000) |
Cash paid as deposit on acquisition of True Wireless, LLC | (500,000) | |
Net cash used in investing activities | (147,000) | (503,000) |
Financing activities | ||
Sale of common stock for cash | 1,175,000 | 857,500 |
Cash paid for settlement of notes payable | (485,000) | |
Advances from related party, net of repayment | 33,000 | 38,500 |
Loan proceeds | 519,000 | 770,000 |
Loan repayment | (338,757) | (526,903) |
Net cash provided by financing activities | 903,243 | 1,139,097 |
Net increase (decrease) in cash and cash equivalents | 152,134 | (5,780) |
Cash and cash equivalents, beginning of year | 63,709 | 69,489 |
Cash and cash equivalents, end of year | 215,843 | 63,709 |
Supplemental cash flow information | ||
Interest | 128,850 | 30,268 |
Income taxes | ||
Non-cash investing and financing activities: | ||
Common stock for services to be rendered issued included in prepaid expenses | 1,180,157 | 218,111 |
Common stock issued for deposit on investment | 1,200,000 | |
Common stock issued for settlement of notes payable | 1,916,441 | 510,754 |
Warrant issued for prepaid services | 349,127 | |
Treasury stock acquired in settlement of notes payable | $ 1,069,200 |
Basis of Presentation and Busin
Basis of Presentation and Business | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Business | 1 BASIS OF PRESENTATION AND BUSINESS Basis of presentation The accompanying consolidated financial statements include the accounts of Surge Holdings, Inc. (“Surge”), formerly Ksix Media Holdings, Inc. (the “Holdings”), incorporated in Nevada on August 18, 2006, and its wholly owned subsidiaries, Ksix Media, Inc. (“Media”), incorporated in Nevada on November 5, 2014, Ksix, LLC (“KSIX”), a Nevada limited liability company that was formed on September 14, 2011, Surge Blockchain, LLC (“Blockchain”), formerly Blvd. Media Group, LLC (“BLVD”), a Nevada limited liability company that was formed on January 29, 2009, DigitizeIQ, LLC (“DIQ”) an Illinois limited liability company that was formed on July 23, 2014 and Surge Cryptocurrency Mining, Inc. (“Crypto”), formerly North American Exploration, Inc. (“NAE”), a Nevada corporation that was incorporated on August 18, 2006 (collectively the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. Business description The Company has been doing business through two of its wholly owned subsidiaries. DIQ is a full service digital advertising agency specializing in survey generation and landing page optimization specifically designed for mass tort action lawsuits. KSIX is an Internet marketing company. KSIX is an advertising network designed to create revenue streams for its affiliates and to provide advertisers with increased measurable audience. KSIX provides performance based marketing solutions to drive traffic and conversions within a Cost-Per-Lead (“CPL”) business model. KSIX has an online advertising network that works directly with advertisers and other networks to promote advertiser campaigns and manages offer tracking, reporting and distribution. Other subsidiaries are inactive as of the date of this consolidated financial statement. In December 2017, the Company renamed Blockchain and Crypto and intend to pursue the following business models. Blockchain is focused on expanding development and licensing for a Blockchain Service as a Software (SaaS) Payments Platform in order to deliver a real product that improves people’s lives. Crypto intends to strategically mine Bitcoin, Litecoin and other cryptocurrencies. The company is working to finalize its first mining farm of 100 Antminer L3+ machines. The mining operation will work 24/7 to both generate revenues and deliver to the Company a commodity. Effective December 7, 2016, the Company executed a Master Exchange Agreement for the exchange of Common Stock, Management and Control (the “Exchange Agreement”) with True Wireless, LLC (“TW”) and Kevin Brian Cox (“Cox”), the sole owner of TW’s issued and outstanding membership interests. TW’s primary business operation is a full-service telecommunications company specializing in the Lifeline program which provides subsidized mobile phone service for low income individuals. The acquisition has not closed as of the date of these financial statements (See Note 12 for details). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of estimates in the presentation of financial statements The preparation of financial statements in conformity with generally accepted accounting principles 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 net revenue and expenses during each reporting period. Actual results could differ from those estimates. Accounts receivable and allowance for doubtful accounts Accounts receivable are generally due thirty days from the invoice date. The Company has a policy of reserving for uncollectible accounts based on their best estimate of the amount of profitable credit losses in its existing accounts receivable. The Company extends credit to its customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for potential bad debts if required. The Company determines whether an allowance for doubtful accounts is required by evaluation of specific accounts where information indicates the customer may have an inability to meet financial obligations. In these cases, the Company uses assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. The Company may also record a general allowance as necessary. Direct write-offs are taken in the period when the Company has exhausted their efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate that the Company should abandon such efforts. For the years ended December 31, 2017 and 2016, the Company reported $10,000 and $36,954 of bad debt expense, respectively. Credit risk The Company had cash deposits in certain banks that at times may have exceeded the maximum insured by the Federal Deposit Insurance Corporation. The Company monitors the financial condition of the banks and has experienced no losses on these accounts. Earnings (loss) per common share The Company is required to report both basic earnings per share, which is based on the weighted-average number of common shares outstanding, and diluted earnings per share, which is based on the weighted-average number of common shares outstanding plus all potential dilutive shares outstanding. At December 31, 2017 and 2016, there were no potentially dilutive common stock equivalents. Accordingly, basic and diluted earnings (loss) per share are the same for each of the periods presented. Contingencies Certain conditions may exist as of the date financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. Company management and its legal counsel assess such contingencies related to legal proceeding that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or if probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed. Share-based compensation The Company accounts for share-based compensation in accordance with Financial Accounting Standards Board (“FASB”) ASC 718, “Compensation-Stock Compensation.” Under the fair value recognition provisions of this pronouncement, share-based compensation cost is measured at the grant date based on the fair value of the award, reduced as appropriate based on estimated forfeitures, and is recognized as expense over the applicable vesting period of the stock award using the accelerated method. The excess tax benefit associated with stock compensation deductions have not been recorded in additional paid-in capital. When evaluating whether an excess tax benefit has been realized, share based compensation deductions are not considered realized until NOLs are no longer sufficient to offset taxable income. Such excess tax benefits will be recorded when realized. Property and equipment Property and equipment and software development costs are stated at cost, less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over the life of the lease if it is shorter than the estimated useful life. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations. Computer and office equipment is generally three to five years and office furniture is generally seven years. Business combinations We allocate the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed 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 users, 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. Goodwill Goodwill is recognized for the excess of the purchase price over the fair value of tangible and identifiable intangible net assets of businesses acquired. Goodwill is not being amortized, but is reviewed at least annually for impairment. In our evaluation of goodwill impairment, we perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not conclusive, we proceed to a two-step process to test goodwill for impairment including comparing the fair value of the reporting unit to its carrying value (including attributable goodwill). Fair value for our reporting units is determined using an income or market approach incorporating market participant considerations and management’s assumptions on revenue growth rates, operating margins, discount rates and expected capital expenditures. Fair value determinations may include both internal and third-party valuations. Unless circumstances otherwise dictate, we perform our annual impairment testing in the fourth quarter. We perform the allocation based on our knowledge of the market in which we operate, and our overall knowledge of the industry. Revenue recognition The Company recognizes revenue in accordance with Accounting Standard Codification (“ASC”) 605-10 (previously Securities and Exchange Commission Staff Accounting Bulletin No. 104, Revenue Recognition). Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The Company’s revenues are derived from online advertising sales and on a cost per lead (“CPL”) basis. Revenue from advertisers on a CPL basis is recognized in the period the leads are accepted by the client, following the execution of a service agreement and commencement of the services. Deferred revenue DIQ generally requires prepayment of the initial contract amount in advance of services being performed. As such, the advance payment is deferred as a current liability until DIQ delivers the surveys contracted. At that time revenue is recognized and the deferred revenue liability is reduced. Fair value measurements The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: ● Level 1 — quoted prices in active markets for identical assets or liabilities. ● Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable. ● Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions). The derivative liability in connection with the conversion feature of the convertible debt, classified as a Level 3 liability, is the only financial liability measure at fair value on a recurring basis. The change in the Level 3 financial instrument is as follows: 2017 2016 Balance, beginning of year $ 584,168 $ - Issued during the year 22,368 1,226,020 Converted (1,017,840 ) (373,616 ) Change in fair value recognized in operations 504,201 (268,236 ) Balance, end of year $ 92,897 $ 584,168 The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model, using the following assumptions as of December 31, 2017 and December 31, 2016: 2017 2016 Estimanted dividends None None Expected volatility 179.55 % 261.35 % Risk free interest rate 2.58 % 2.79 % Expected term 0.01-36 months 0.01-36 months Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Advertising costs Advertising costs are expensed as incurred in accordance with ASC 720-35 “Advertising Costs”. The Company incurred advertising costs of $2,255 and $73,924 for the years ended December 31, 2017 and 2016, respectively, which are included in selling, general and administrative expenses on the Company’s consolidated financial statements. Income taxes We use the asset and liability method of accounting for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. 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 the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. Through December 23, 2014, KSIX and BLVD operated as limited liability companies and all income and losses were passed through to the owners. Through October 12, 2015, DIQ operated as a limited liability company and all income and losses were passed through to its owner. Subsequent to the acquisition dates, these limited liability companies were owned by Surge and became subject to income tax. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented. Asset impairment and disposal of long-lived assets Long-lived assets, such as property, equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets or asset groups to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of the asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized equal to the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. Assets to be disposed would be presented separately in the Consolidated Balance Sheet. Reclassifications Certain prior period amounts have been reclassified to conform to the current year’s presentation. Recent accounting pronouncements In May 2016, FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients”. The update is to address certain issues identified by the FASB/IASB Joint Transition Resource Group for Revenue Recognition (TRG) in the guidance on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition, the Board decided to add a project to its technical agenda to improve Topic 606, Revenue from Contracts with Customers, by reducing: 1) the potential for diversity in practice at initial application and 2) the cost and complexity of applying Topic 606 both at transition and on an ongoing basis. The amendments in this Update affect entities with transactions included within the scope of Topic 606. The scope of that Topic includes entities that enter into contracts with customers to transfer goods or services (that are an output of the entity’s ordinary activities) in exchange for consideration. The amendments to the recognition and measurement provisions of Topic 606 also affect entities with transactions included within the scope of Topic 610, Other Income. The amendments in this Update affect the guidance in Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The adoption of this guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements and related disclosures. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, In May 2017, the FASB issued ASU 2017-09, “ Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” In December 2017, the Securities and Exchange Commission (“SEC”) released Staff Accounting Bulletin No. 118 (the “Bulletin”), which provides accounting guidance regarding accounting for income taxes for the reporting period that includes the enactment of the Tax Act. The Bulletin provides guidance in those situations where the accounting for certain income tax effects of the Tax Act will be incomplete by the time financial statements are issued for the reporting period that includes the enactment date. For those elements of the Tax Act that cannot be reasonably estimated, no effect will be recorded. The SEC has provided in the Bulletin that in situations where the accounting is incomplete for certain effects of the Tax Act, a measurement period which begins in the reporting period that includes the enactment of the Tax Act and ends when the entity has obtained, prepared and analyzed the information is needed in order to complete the accounting requirements. The measurement period shall not exceed one year from enactment. Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | 3 GOING CONCERN The Company has not established sources of revenues sufficient to fund the development of its business, or to pay projected operating expenses and commitments for the next year. The Company has a working capital deficiency of $2,166,906 as of December 31, 2017 incurred losses and did not generate cash from its operations for the past two years. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The Company projects that it should be cash flow positive after the end of the 2nd quarter ended June 30, 2018 from ongoing operations by the combination of increased cash flow from its current subsidiaries, as well as restructuring our current debt burden and completion of the acquisition of TW an Oklahoma Limited Liability Company. The Company has executed an agreement with a FINRA licensed broker, as well as several institutional investors, to bring in equity investments to pay down existing debt obligations, cover short term shortfalls, and complete proposed acquisitions. The Company’s ability to continue as a going concern is dependent on the success of this plan. The Company’s financial statements have been presented on the basis that it continues as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 4 INTANGIBLE ASSETS Intangible assets are as follows: Term 2017 2016 DIQ customer relationships 5 years $ 183,255 $ 183,255 DIQ noncompetition agreement 2 years 201,389 201,389 384,644 384,644 Accumulated amortization 282,723 167,449 $ 101,921 $ 217,195 Asset impairment $ - $ 372,706 Amortization expense: $ 115,274 $ 430,128 Effective April 1, 2016, the Company temporarily suspended its BLVD business operations and is reviewing a potential discontinuation of the business. BLVD had only nominal operations in 2017 and 2016. In addition, the Company evaluated the operations of KSIX at the end of 2016 and determined that, due to declining cash flows, the unamortized balance of the intangible assets associated with KSIX and BLVD should be impaired. An impairment of $372,706 was recorded. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5 PROPERTY AND EQUIPMENT Property and equipment consisted of the following: 2017 2016 Equipment ¹ $ 166,107 $ 19,107 Accumulated depreciation 8,663 4,675 Net property and equipment $ 157,444 $ 14,432 Depreciation expense $ 3,988 $ 2,990 ¹ Includes costs related to equipment not placed in service as of December 31, 2017 and December 31, 2016 of $147,000 and $0, respectively. |
Credit Card Liability
Credit Card Liability | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Credit Card Liability | 6 CREDIT CARD LIABILITY The Company has utilized a credit card issued in the name of DIQ to pay for certain of its trade obligations. At December 31, 2017 and December 31, 2016, the Company’s credit card liability was $336,726 and $336,726, respectively. The credit card liability is guaranteed by Scott Kaplan, the vice president of business development for KSIX, LLC. See Note 13. |
Long-Term Debt - Related Party
Long-Term Debt - Related Party | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt - Related Party | 7 LONG-TERM DEBT – RELATED PARTY Long-term debt due to related parties consists of: December 31, 2017 December 31, 2016 Notes payable to SMDMM Funding, LLC; interest at 8% per annum; due on demand $ 285,000 $ - Notes payable to True Wireless, LLC; non-interest bearing; due on demand 19,000 - Note payable to director due in four equal annual installments of $26,875 on April 28 of each year - 107,500 304,000 107,500 Less current portion - related party - 53,750 Long-term debt - related party $ 304,000 $ 53,750 SMDMM Funding, LLC and True Wireless, LLC are owned by the Company’s chief executive officer. Accrued interest owed to SMDMM Funding, LLC was $1,711 at December 31, 2017. On April 28, 2015, the Company issued a promissory note to a director for the principal amount of $107,500. The promissory note is due in four equal annual payments of $26,875 on April 28 each year. The payments due April 28, 2016 and 2017 for the notes payable to a former director have not been made. Pursuant to the terms of the note, the note began to accrue interest at 6% per annum and the past due portion is convertible into the Company’s common stock at a conversion price equal to 70% of the current price of the common stock. The Company determined that the conversion feature for the past due portion of the note constitutes a derivative which was bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded to the note. Accrued interest was $1,088 at December 31, 2016. The director resigned in July 2017; accordingly, the note balance was included with other notes payable beginning in September 2017. See Note 8. |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable and Long-Term Debt | 8 NOTES PAYABLE AND LONG-TERM DEBT As of December 31, 2017, notes payable and long-term debt consists of: Note Balance Debt Discount Carrying Value On October 26, 2011, the Company entered into a note payable in the amount of $362,257, relating to a Unit redemption agreement bearing interest at 6% per annum and is payable in equal monthly installments of $7,003, inclusive of interest, past due. This note was settled for $10,000 in February 2018. $ 68,973 $ - $ 68,973 Note payable to former officer and director due in four equal annual installments of $26,875 beginning April 28, 2016; past due in 2016 and 2017; accruing interest at 6% per annum since April 28, 2016 on the past due portion 107,500 - 107,500 Note payable to former officer due in four equal annual installments of $25,313 on April 28 of each year; past due in 2016 and 2017; accruing interest at 6% per annum since April 28, 2016 on the past due portion 101,250 - 101,250 Notes payable to seller of DigitizeIQ, LLC due as noted below² 485,000 - 485,000 Convertible note payable to River North Equity LLC dated July 13, 2016 with interest at 10% per annum; due April 13, 2017; convertible into common stock 5 27,500 - 27,500 790,223 - 790,223 Less current portion 738,035 - 738,035 Long-term debt $ 52,188 $ - $ 52,188 As of December 31, 2016, notes payable and long-term debt consists of: Note Balance Debt Discount Carrying Value On October 26, 2011, the Company entered into a note payable in the amount of $362,257, relating to a Unit redemption agreement bearing interest at 6% per annum and is payable in equal monthly installments of $7,003, inclusive of interest, past due $ 68,973 $ - $ 68,973 Convertible Promissory Note - Non-interest bearing; on January 19, 2016, the Company modified the terms of a secured note payable in the original amount of $950,000 and made the $700,000 balance convertible 1 590,000 - 590,000 Note payable to former officer due in four equal annual installments of $25,313 on April 28 of each year; past due in 2016; accruing interest at 6% per annum since April 28, 2016 on past due portion 101,250 - 101,250 Notes payable to seller of DigitizeIQ, LLC due as noted below 2 485,000 - 485,000 Senior Secured Credit Facility dated February 24, 2016; interest at 18% per annum; interest only for two months then 16 payments of $28,306 monthly 3 261,043 - 261,043 Note payable to Calvary Fund I LP dated May 25, 2016 with interest at 18% 4 130,000 - 130,000 Convertible note payable to River North Equity LLC dated July 13, 2016 with interest at 10% per annum; due April 13, 2017; convertible into common stock 5 27,500 8,774 18,726 Convertible promissory notes payable to Salksanna, LLC dated October 7, 2016 and December 21, 2016 with interest at 10% per annum; due March 13, 2018; convertible into common stock 6 95,405 87,379 8,026 Working capital notes 7 183,757 - 183,757 1,942,928 96,153 1,846,775 Less current portion 1,796,898 8,774 1,788,124 Long-term debt $ 146,030 $ 87,379 $ 58,651 1 Convertible Promissory Note st th The original note and the convertible promissory note provide for semi-monthly payments of $10,000 due on the 1 st th In May 2017, the Company issued 6,257,459 shares of its common stock and in November 2017, the Company issued 1,750,000 shares of its common stock in exchange for the balance due on the note. 2 Notes due seller of DigitizeIQ, LLC includes a series of notes as follows ● A non-interest bearing Promissory Note made payable to the Seller in the amount of $250,000, which was due on November 12, 2015; (Paid February 26, 2016). ● A second non-interest bearing Promissory Note made payable to the Seller in the amount of $250,000, which was due on January 12, 2016; (Balance at December 31, 2016 - $235,000) ● A third non-interest bearing Promissory Note made payable to the Seller in the amount of $250,000, which was due on March 12, 2016 (Unpaid). The Company is renegotiating the terms of the notes. The notes bear interest at 5% per annum when in default (after the due date). The notes were non-interest bearing until due. Accordingly, a debt discount at 5% per annum was calculated for the notes and was amortized to interest expense until the due date of the notes. 3 Senior Secured Credit Facility Agreement - 6 6 The Senior Credit Facility includes a provision for advisory fees in the amount of $300,000 which was paid when the Company issued 1,782,000 shares of its common stock to TCA (the “Advisory Shares”) on or about March 24, 2016. If TCA is unable to collect the $300,000 from sales of the Advisory Shares within twelve months, the Company is obligated to issue additional shares to TCA until TCA is able to collect the full $300,000. Should TCA still be unable to collect the full $300,000, and after at least one year, TCA can require the Company to redeem any remaining shares for an amount equal to $300,000 less the sales proceeds that TCA has collected. In the event TCA sells the Advisory Shares for more than $300,000, the excess proceeds, together with unsold common shares will be returned to the Company. As long as there is no default under the terms of the Senior Credit Facility, TCA is limited to weekly sales of the Advisory Shares equal to no more than 20% of the average weekly volume of the Company’s common stock on its principal trading market. The stock was valued at the trading price on the date of the agreement and the resulting $300,000 was included as a direct reduction from the carrying amount of the debt liability and was fully amortized at December 31, 2016. The Convertible Note is convertible into the Common Stock of the Company upon the event of: (1) a default under any of the loan documents between the Company and TCA; or (2) mutual agreement between the Company and TCA, at which time TCA may convert all or a portion of the outstanding principal, accrued and unpaid interest into shares of the Common Stock of the Company calculated by the conversion amount divided by 85% of the lowest of the daily weighted average price of the Company’s Common Stock during five business days immediately prior to the date of the request of conversion (the “Conversion”). Pursuant to the terms of the Convertible Note, TCA is limited to beneficial ownership of not more than 4.99% of the issued and outstanding Common Stock of the Company after taking into effect the Common Stock to be issued pursuant to the Conversion. The TCA note was restructured effective August 29, 2016, September 29, 2016 and October 29, 2016 to accommodate the payment of the amounts due on those dates by Salksanna, LLC and the issue by the Company of convertible notes payable to Salksanna for the amounts of those payments. (See 6 The Company evaluated the resulting embedded conversion feature for derivative treatment and recorded an initial derivative liability and debt discount of $163,883. The debt discount was fully amortized at December 31, 2016. The Company was also responsible for other transaction, due diligence and legal fees of $42,500 if it borrowed the remaining $350,000 initially committed. The proceeds from the loan were used to pay a $250,000 note to the seller of DIQ and for working capital. The Company paid $375,000 in cash on December 7, 2017 in full payment of the note and the 1,782,000 shares held by TCA were returned to the Company and are included in treasury stock at December 31, 2017. 4 The payments due November 25, 2016 and December 25, 2016 were not made. As a result, the Company was penalized $30,000, which was added to the note balance and due to other past due obligations, it was determined the total balance was in default and due, making the note convertible. Accordingly, a debt discount for the derivative liability was recorded on November 25, 2016 for $52,889. At December 31, 2016, the debt discount was fully amortized. The Company issued 100,000 shares of its common stock on January 24, 2017; 310,675 shares of its common stock on March 8, 2017; 512,128 shares of its common stock on October 16, 2017; and 260,000 shares of its common stock on November 15, 2017 in full payment of the note. 5 The Company has entered into a number of agreements with RNE wherein RNE has agreed to invest up to $3,000,000 in the common stock of the Company. These agreements require an effective Registration Statement to be on file by the Company and would allow the Company to require RNE to purchase the Company’s common stock at 70% of the lowest trading price of the Company’s common stock during the previous twenty-one trading days. The Company has not yet filed a Registration Statement with the SEC. 6 At December 31, 2016, the remaining notes with a principal balance of $95,405 had a debt discount of $87,379. On December 7, 2017, the Company paid $110,000 in cash in full payment of the balances due on the notes. 7 Derivative liability The Company has determined that the conversion feature embedded in the notes referred to above that contain a potential variable conversion amount constitutes a derivative which has been bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded to the associated debt. The excess of the derivative value over the face amount of the note, if any, is recorded immediately to interest expense at inception. The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model, using the following assumptions: December 31, 2017 December 31, 2016 Estimated dividends None None Expected volatility 178.98% to 238.94% 194.65% to 273.69% Risk free interest rate 2.58% to 2.89% 1.77% to 2.86% Expected term 0.01 to 36 months 0.01 to 36 months |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9 INCOME TAXES The income tax provision (benefit) consists of the following: 2017 2016 Federal: Current $ - $ - Deferred (403,900 ) (1,267,100 ) Change in valuation allowance 403,900 1,267,100 $ - $ - The Company’s income is earned in Nevada, and is thus not subject to state income tax. The expected tax benefit based on the statutory rate is reconciled with actual tax benefit as follows: 2017 2016 U.S. federal statutory rate -34.0 % -34.0 % State income tax, net of federal benefit 0.0 % 0.0 % Increase (decrease) in valuation allowance 34.0 % 34.0 % 0.0 % 0.0 % Deferred tax assets consist of the effects of temporary differences attributable to the following: 2017 2016 Deferred tax assets Net operating losses $ 1,943,700 $ 1,621,400 Option compensation accrual 184,000 102,400 Deferred tax assets 2,127,700 1,723,800 Valuation allowance (2,127,700 ) (1,723,800 ) Deferred tax assets, net of valuation allowance $ - $ - The Company has approximately $6 million of net operating losses (“NOL”) carried forward to offset taxable income in future years which expire commencing in fiscal 2034. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets relating to NOLs for every period because it is more likely than not that all of the deferred tax assets will not be realized. The U.S. Tax Cuts and Jobs Act (Tax Act) was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21% and creates new taxes on certain foreign-sourced earnings and certain related-party payments, which are referred to as the global intangible low-taxed income tax and the base erosion tax, respectively. The Tax Act requires us to pay U.S. income taxes on accumulated foreign subsidiary earnings not previously subject to U.S. income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets and 8% on the remaining earnings. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, the Company has not recorded any adjustments according to Tax Act. As we collect and prepare necessary data, and interpret the Tax Act and any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, we may make adjustments to the provisional amounts. Those adjustments may materially impact our provision for income taxes and effective tax rate in the period in which the adjustments are made. The accounting for the tax effects of the Tax Act will be completed in 2018. |
Stockholder's Equity
Stockholder's Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholder's Equity | 10 Stockholder’s equity On October 10, 2017, the Company effectuated an increase in its authorized shares to a total of 600,000,000 shares comprising 100,000,000 shares of Preferred Stock par value $0.001 and 500,000,000 shares of Common Stock par value $0.001. PREFERRED STOCK At December 31, 2017 and December 31, 2016 the Company had 10,000,000 shares of its Preferred Stock issued and outstanding. Series “A” Preferred Stock On May 6, 2016, the Company, pursuant to the consent of the Board of Directors filed a Certificate of Designation with the Nevada Secretary of State which designated 10,000,000 shares of the Company’s authorized preferred stock as Series “A” Preferred Stock, par value $0.001. (See Note 15). The Series “A” Preferred Stock has the following attributes: ● Ranks senior only to any other class or series of designated and outstanding preferred shares of the Company; ● Bears no dividend; ● Has no liquidation preference, other than the ability to convert to common stock of the Company; ● The Company does not have any rights of redemption; ● Voting rights equal to ten shares of common stock for each share of Series “A” Preferred Stock; ● Entitled to same notice of meeting provisions as common stock holders; ● Protective provisions require approval of 75% of the Series “A” Preferred Shares outstanding to modify the provisions or increase the authorized Series “A” Preferred Shares; and ● Each ten Series “A” Preferred Shares can be converted into one common share at the option of the holder. On May 6, 2016, upon filing the Certificate of Designation which designated 10,000,000 shares of the Company’s $0.001 par value preferred stock as Series “A”, the board of directors authorized the Company to issue all 10,000,000 shares of Series “A” Preferred Stock to Carter Matzinger, Chief Executive Officer and Chairman of the Board of Directors, for services previously rendered. The Company valued these shares based upon their conversion rate of 10 shares of preferred stock for each share of common stock based on the market price of the common stock as of March 30, 2016 of $0.19 per share. The Company recorded compensation expense in the amount of $190,000. On March 29, 2018, the Company filed a Certificate of Amendment to its Certificate of Designations for its Series A Preferred Stock which increased the authorized Series A Preferred Stock from 10,000,000 shares to 13,000,000 shares. COMMON STOCK At December 31, 2017 and December 31, 2016, the Company had 90,057,445 shares and 57,343,901 shares of its Common Stock issued and 88,275,445 and 57,343,901 shares outstanding, respectively. 2017 Transactions During 2017, the Company issued its common stock in the following transactions: ● 7,225,000 shares were issued for cash in the amount of $1,175,000; ● 9,823,544 shares were issued for notes payable and accrued interest in the amount of $1,916,441; and ● 3,665,000 shares were issued in exchange for services valued at $940,173, and On March 24, 2017, 12,000,000 shares of common stock were issued to Brian Cox pursuant to a Master Agreement for the Exchange of Common Stock, Management and Control as a part of the planned acquisition of True Wireless, LLC. These shares were valued at the fair market value on the date issued of $1,200,000. 2016 Transactions Effective January 4, 2016, the Company issued 250,000 shares of its common stock pursuant to a legal services agreement. The common stock was valued at $112,500 based on the closing price of the common stock on that date. Effective February 1, 2016, the Company issued 250,000 shares of its common stock pursuant to a consulting agreement. The common stock was valued at $30,000 based on the closing price of the common stock on that date. On February 24, 2016, the Company issued 1,782,000 shares of its common stock for advisory fees pursuant to the Senior Secured Credit Facility Agreement (Note 9). The stock was valued at the trading price on the date of the agreement and the resulting $300,000 was included as a reduction of the related note payable and was fully amortized at December 31, 2016. On April 1, 2016, the Company issued 454,545 shares of its common stock valued at $20,000 in exchange for principal payments in that amount due on a note payable. On April 5, 2016, the Company issued 1,000,000 shares of its common stock valued at $180,000 in partial consideration for a six-month consulting agreement. The $180,000 was amortized to expense over the term of the agreement. On April 18, 2016, the Company issued 100,000 shares of its common stock in exchange for cash in the amount of $10,000. On May 10, 2016, the Company issued 1,000,000 shares of its common stock valued at $190,000 in partial consideration for a two-year consulting agreement with a director. The $190,000 is being amortized to expense over the term of the agreement. On May 13, 2016, the Company issued 1,800,000 shares of its common stock as part of the Unit Subscription Agreement described in (1) below for consideration of $180,000. On May 23, 2016, the Company issued 240,000 shares of its common stock as partial consideration for a six- month public relations consulting agreement. The shares were valued at $38,688, which was amortized to expense over the term of the agreement. On June 10, 2016, the Company issued a total of 3,150,000 shares of its common stock to six employee/consultants in exchange for prior services. The stock was valued at $516,600 and the amount is included in selling, general and administrative expense. On August 17, 2016, the Company issued 1,000,000 shares of its common stock valued at $100,000 in consideration for a one year consulting agreement. The amount is being amortized to expense over the term of the agreement. On September 19, 2016, the Company issued 250,000 shares of its common stock in exchange for cash consideration of $20,000. On September 22, 2016, the Company issued 625,000 shares of its common stock as part of the Unit Subscription Agreement described in (2) below for consideration of $50,000. Effective October 6, 2016, the Company issued 1,000,000 shares of its common stock valued at $50,000 in partial consideration for a six-month consulting contract. This amount is being amortized to expense over the term of the agreement. Effective October 26, 2016, the Company issued 1,953,399 shares of its common stock in exchange for the Company’s convertible note payable in the amount of $53,452 plus accrued interest of $5,345. Effective October 26, 2016, the Company issued 383,525 shares of its common stock in exchange for a portion of the Company’s convertible note payable in the amount of $11,500 plus accrued interest of $44. On November 23, 2016, the Company entered into a one year consulting agreement with an individual which called for compensation with a cashless warrant for 1,500,000 shares of the Company’s common stock. The warrant was valued at $389,699, which amount was included in repaid expense and additional paid in capital. The prepaid expense is being amortized over the one year term of the agreement. During November and December 2016 the Company sold 5,975,000 Units at a price of $0.10 per Unit and consisting of one share of common stock and one-half warrant to purchase additional common stock at a purchase price of $0.50 per share for a period of three years as described in (3) below for consideration of $597,500. COMMON STOCK OPTIONS Pursuant to his employment agreement with the Company, Carter Matzinger was awarded a “Performance Based Stock Option” of 3,000,000 shares of the Company’s common stock and a “Time Based Stock Option” of up to 3,000,000 shares of Common Stock of the Company. Both sets of options come with Registration Rights and when requested by Mr. Matzinger, the Company will be required to file a Form S-8 Registration Statement. The Time Based Stock Options vested on September 24, 2016 on the one year anniversary of Mr. Matzinger’s employment contract. The terms of both types of common stock option awards are described as follows: Performance Based Stock Options ● Stock Option #1 (Vests after revenues resulting in $10,000,000 in Annual Sales) to purchase up to 1,000,000 shares of the common stock of the Company (good for 3 years from vesting) at $0.12 per share. ● Stock Option #2 (Vests after revenues resulting in $15,000,000 annual sales) to purchase 1,000,000 shares of the common stock of the Company (good for 3 years from vesting) at $0.30 per share. ● Stock Option #3 (Vests after revenues resulting in $20,000,000 annual sales) to purchase 1,000,000 shares of the common stock of the Company (good for 3 years from vesting) at $0.50 per share. Time Based Stock Options ● Stock Option #4 (Vests One Year from date of Employment Agreement) to purchase 1,000,000 shares of the common stock of the Company (good for 3 years from vesting) at a price of $0.12 per share. ● Stock Option #5 (Vests One Year from date of Employment Agreement) to purchase 1,000,000 shares of the common stock of the Company (good for 3 years from vesting) at a price of $0.30 per share. ● Stock Option #6 (Vests One Year from date of Employment Agreement) to purchase 1,000,000 shares of the common stock of the Company (good for 3 years from vesting) at a price of $0.50 per share. The following assumptions were used to value the options: Expected term 4 years Expected average volatility 398.18 % Expected dividend yield 0 % Risk-free interest rate 1.44 % Expected annual forfeiture rate 0 % No value was recorded for the performance based stock options. The time based stock options were valued at $959,940 using Black-Scholes model, based on the assumptions above, which was amortized over the service period of four years. UNIT SUBSCRIPTION AGREEMENT – WARRANTS (1) On May 13, 2016, the Company entered into a Unit subscription agreement with BCAN Holdings, LLC, which is controlled by the Chief Strategy Officer of the Company. Each Unit was priced at $0.10 and contained: (a) one share of common stock restricted in accordance with Rule 144; and (b) two Warrants to purchase an additional share of common stock restricted in accordance with Rule 144 for $0.75 for a period of 18 months after the close of the offering. Pursuant to the Unit subscription agreement, the Company offered to the individual a minimum of 1,800,000 Units ($180,000) and a maximum of 5,000,000 Units ($500,000). The individual purchased the minimum of 1,800,000 Units ($180,000) on May 13, 2016 and had a non-transferable and irrevocable option to purchase the remaining 3,200,000 Units ($320,000) for a period of 120 days from the effective date of May 13, 2016, which expired on September 10, 2016. The Warrants are classified as equity since they have a fixed exercise price and do not have a provision for modification. (2) On September 16, 2016, the Company entered into a Unit subscription agreement with BCAN Holdings, LLC, which is controlled by the Chief Strategy Officer of the Company. Each Unit was priced at $0.08 and contained: (a) one share of common stock restricted in accordance with Rule 144; and (b) two Warrants to purchase an additional share of common stock restricted in accordance with Rule 144 for $0.50 for a period of 18 months after the close of the offering. Pursuant to the Unit subscription agreement, the Company offered to the individual a minimum of 625,000 Units ($50,000) and a maximum of 4,000,000 Units ($320,000). The individual purchased the minimum of 625,000 Units ($50,000) on September 22, 2016 and has a non-transferable and irrevocable option to purchase the remaining 3,375,000 Units ($270,000) for a period of 45 days from the effective date of September 22, 2016. The option expired on November 14, 2016. The Warrants are classified as equity since they have a fixed exercise price and do not have a provision for modification. (3) During November and December 2016, the Company entered into Unit subscription agreements with seventeen unrelated companies and individuals. Each Unit was priced at $0.10 and contained: (a) one share of common stock restricted in accordance with Rule 144; and (b) one-half Warrant to purchase an additional share of common stock restricted in accordance with Rule 144 for $0.50 for a period of three years after the close of the offering. The parties purchased 5,975,000 Units ($597,500) during November and December 2016. The Warrants are classified as equity since they have a fixed exercise price and do not have a provision for modification. (4) The Company entered into Unit subscription agreements during the period from January through August 2017. Each Unit was priced at $0.10 and contained: (a) one share of common stock restricted in accordance with Rule 144; and (b) one-half Warrant to purchase an additional share of common stock restricted in accordance with Rule 144 for $0.50 for a period of three years after the close of the offering. The parties purchased 2,700,000 Units ($270,000) with 1,350,000 Warrants. The Warrants are classified as equity since they have a fixed exercise price and do not have a provision for modification. (5) The Company entered into Unit subscription agreements during the period from September through December 2017. Each Unit was priced at $0.20 and contained: (a) one share of common stock restricted in accordance with Rule 144; and (b) one-half Warrant to purchase an additional share of common stock restricted in accordance with Rule 144 for $0.50 for a period of three years after the close of the offering. The parties purchased 4,525,000 Units ($905,000) with 2,262,500 Warrants. The Warrants are classified as equity since they have a fixed exercise price and do not have a provision for modification. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11 RELATED PARTY TRANSACTIONS The Company’s chief executive officer has advanced the Company various amounts on a non-interest bearing basis, which is being used for working capital. The advance has no fixed maturity. The activity is summarized as follows: December 31, 2017 December 31, 2016 Balance at beginning of period $ 356,502 $ 318,002 New advances 34,000 40,000 Repayment (1,000 ) (1,500 ) Balance at end of period $ 389,502 $ 356,502 On May 6, 2016, the Company issued 10,000,000 shares of Series “A” Preferred Stock to Carter Matzinger, Chief Executive Officer and Chairman of the Board of Directors, for services previously rendered. The Preferred Stock was valued at $190,000 and recorded as compensation expense. See Note 7 for long-term debt due to a director and related parties. Axia Management, LLC (“Axia”), is wholly owned by the Company’s Chief Executive Officer, Kevin Brian Cox, and provides a prepayment for the Company in regard to the Surge Media Division Facebook Ads and charges by use of the Axia credit card. Axia is reimbursed for the actual amount of credit card charges. In 2017 the reimbursement amount was $138,556 and has been reimbursed in full. Axia has not received any compensation for its accommodation. On May 10, 2016, the Company entered into a Consulting Agreement with Anthony P. Nuzzo, Jr., the Company’s Chief Operating Officer and a director, for a term of two years. Pursuant to the terms of the Consulting Agreement, the Company has delivered 1,000,000 shares of Company Common Stock value at $190,000, which is being amortized over the two year term of the agreement. The Company contracts for call center services with CenterCom, LLC, a company which is owned by Anthony P. Nuzzo, Jr., the Chief Operating Officer and a director of the Company and Kevin Brian Cox, the Chief Executive Officer and a director of the Company. During 2017, the Company paid an aggregate of $6,678 to CenterCom, LLC. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12 COMMITMENTS AND CONTINGENCIES True Wireless, LLC (now True Wireless, Inc.) Master Agreement for the Exchange of Common Stock, Management, and Control On or about December 7, 2016, the Company, entered into a Master Agreement for the Exchange of Common Stock, Management, and Control (the “Exchange Agreement”) with True Wireless, LLC, an Oklahoma Limited Liability Company (“TW”) and the members of TW (the “Members”). Hereinafter, the Company, TW, and its Members may be referred to as a “Party” individually or collectively as the “Parties”. TW’s primary business operation is a full-service telecommunications company specializing in the Lifeline program as set forth by the Telecommunications Act of 1996 and regulated by the FCC which provides subsidized mobile phone services for low income individuals (“Lifeline Services”). TW currently has an FCC license to offer Lifeline Services in the following states: Oklahoma, Rhode Island, Maryland, Texas, and Arkansas. Kevin Brian Cox (“Cox”), a resident of the State of Tennessee, is the sole owner of all of TW’s issued and outstanding membership interests, either directly or indirectly through EWP Communications, LLC, a Tennessee limited liability company, the beneficial owner of which is Cox. Additionally, pursuant to the terms of the Exchange Agreement, the Company executed and entered into a “Management and Marketing Agreement” (“Management Agreement”) with TW (see below). Pursuant to the Management Agreement, the Company agreed to enter into a Management Agreement with TW whereby the Company would act as the manager of TW until such time as the Exchange Agreement and the transactions contemplated thereunder are approved by the FCC. Following such approval (which has not occurred as of the date of this Report), the Parties will hold a final closing of the Exchange Agreement and TW would become a wholly-owned subsidiary of the Company (collectively, the “Transaction”). First Addendum to Master Agreement for the Exchange of Equity, Management, and Control On March 30, 2017, the Parties executed a First Addendum to the Exchange Agreement extending the time for all material deadlines contemplated therein to be completed by May 1, 2017. Amended Master Agreement for the Exchange of Common Stock, Management, and Control On July 18, 2017, the Parties entered into an Amended Master Agreement for the Exchange of Common Stock, Management, and Control (the “Amended Exchange Agreement”) which amended and restated the Exchange Agreement. The Amended Exchange Agreement reset certain of the milestones and timetables detailed in the Exchange Agreement. The material terms of the Amended Exchange Agreement are as follows: TERMS ● The Management Agreement would commence on July 18, 2017, concurrent with the execution of the Amended Exchange Agreement (the “Management Closing”); ● All other terms and conditions with respect to the Transaction set forth in this Amended Exchange Agreement required to be completed by the Parties would occur only after all required governmental and regulatory approvals of the Transaction have been delivered. At that time, the Parties agreed to complete the Company’s acquisition of TW (the “Equity Closing”). The Parties agreed to expedite preparation of all financial information and audits to be completed at the earliest feasible time. ● The Equity Closing is subject to the completion of due diligence by all Parties to the Amended Exchange Agreement; ● The Transaction (including the Equity Closing) is subject to delivery by the Parties of all documents required under the Amended Exchange Agreement; ● The Company and TW agreed to take all necessary corporate actions to authorize the Management and Equity Closings; and ● It was intended that the transaction underlying the Amended Exchange Agreement would qualify for United States federal income tax purposes as a re-organization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended. However, both Parties recognized that in the event the transaction underlying this Agreement does not qualify for United States federal income tax purposes as a reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended, each party is separately responsible for any tax consequences and indemnifies and holds harmless the other party from and against any and all claims, demands, actions, suits, proceedings, assessments, judgments, damages, costs, losses and expenses, resulting from the that Parties failure to pay their tax liability for this transaction. CLOSINGS THE MANAGEMENT CLOSING The Management Closing occurred on July 18, 2017 pursuant to the following material terms or actions which were approved by the Parties: ● The Company agreed, upon execution of the Amended Exchange Agreement, to deliver (a) $1.5 Million Promissory Note issued by the Company in favor of Cox; and (b) undertake to authorize an additional number of shares of common stock as required to fulfill the terms and conditions of the transactions between the parties; ● Upon the Equity Closing (which has not yet occurred), the Company agreed to issue to Cox and/or his assigns, approximately 114 million shares of Company Common Stock and Warrants to purchase 45 million Company Common Shares for a period of five years at a purchase price of $0.50 per share (subject to adjustment) which can be exercised on a “cashless” basis. As of the date of this Report, 12 million shares of Company Common Stock have been issued to Cox and assigns; ● The Company also agreed to an anti-dilution provision (the “Anti-Dilution Provision”) whereby it would issue such number of additional shares at the Equity Closing as would be necessary to maintain Cox’s percentage ownership of Company Common Stock at the time of the Equity Closing at 69.5% (“Cox Percentage”). This provision applies with respect to any additional stock, warrants or other security issued by the Company prior to the Equity Closing; ● It was agreed that 75% of Carter Matzinger’s (“Matzinger”) Series “A” Preferred Stock (“Series A Preferred Stock”) containing specified majority common stock voting rights of the Company would be transferred by Matzinger to Cox upon execution of the Amended Exchange Agreement. This agreement was subsequently amended to provide for the transfer of 100% of the Series A Preferred Stock by Matzinger to Cox; ● It was agreed that Matzinger would submit for cancellation and retirement all of his (or his assigns) shares of Company Common Stock in excess of 14 million shares. As a result thereof, Matzinger would hold no more than 14 million shares of Company Common Stock following the Equity Closing. Management and Marketing Agreement On or about July 18, 2017, the Company executed and entered into a “Management and Marketing Agreement” (“Management Agreement”) with Cox. Pursuant to the Management Agreement, the Company is obligated to provide certain management services to Cox as detailed in the Management Agreement. On December 27, 2017, the Company and K. Brian Cox mutually agreed to terminate the Management Agreement and cancel the $1,500,000 Promissory Note issued on July 18, 2017, ab initio EQUITY CLOSING (AGREEMENT AND PLAN OF REORGANIZATION) As of March 30, 2018, the parties to the Transaction have restructured the Transaction and intend to have an Equity Closing during the early part of the Company’s 2 nd ● 151,707,516 shares of newly-issued Company Common Stock, which will give the shareholders of TW, on a proforma basis, a 69.5% interest in the Company’s total Common Shares. ● An additional number of shares of Company Common Stock, if any, necessary to vest 69.5% of the aggregate issued and outstanding Common Stock in the shareholders of TW at the Closing. ● A Promissory Note in the original face amount of $3,000,000, bearing interest at 3% per annum maturing on December 31, 2018. ● 3,000,000 shares of newly-issued Company Series A Preferred Stock At the closing of the Merger, outstanding shares in TW together with all documentation to reflect the intent of the Parties such that TW would become a wholly owned subsidiary of the Company shall be delivered to the Company. Pursuant to the terms of the Merger Agreement, the parties confirmed the prior delivery of 12,000,000 shares of Company Common Stock and $500,000 cash which was been paid to the shareholders of TW as a deposit on the Transaction. Conditioned upon the Parties, having completed all material requirements of the Merger Agreement, including all delivery of all Exhibits and Collateral Agreements contemplated thereby, and the receipt of any required third party approvals, the Parties agreed to proceed with the Equity Closing, as follows: Company Investment in TW At the date of this filing, the Company’s investment in TW consists of the following: Shares Amount Consideration paid: Cash paid $ 500,000 Common stock issued 12,000,000 1,200,000 Total consideration paid 12,000,000 $ 1,700,000 Consideration to be paid: Common stock to be issued at closing 151,707,516 $ 60,683,006 Series A Preferred Stock to be issued at closing 3,000,000 120,000 Note payable due December 31, 2018 1,500,000 Total consideration to be paid $ 62,303,006 Total consideration $ 64,003,006 Notes to Table Above 1 Common Stock to be issued at closing at an average price of approximately $0.40 per share. 2 Series A Preferred Stock to be issued at closing at an average price of $0.04 per share. Status of True Wireless Transaction As of the date of this Report, the Transaction has not closed and the Company anticipates its closing early in the second quarter of 2018. The terms of the Transaction are subject to change prior to closing. |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | 13 LITIGATION The following is summary of threatened, pending, asserted or un-asserted claims against the Company or any of its wholly owned subsidiaries. Claims by River North Equity, LLC against KSIX Media Holdings, Inc.: On June 29, 2017, River North Equity, LLC (“River North Equity”) filed suit against the Company and Carter Matzinger in the Circuit Court of the 18th Judicial District of DuPage County in Wheaton, IL (Case # 2017AR000989) arising out of an Equity Purchase Agreement the Company entered into with River North Equity on July 11, 2016. The Complaint alleges that the Company entered into a series of convertible promissory notes in the aggregate face amount of $177,500 and that these notes are presently in default. The Complaint also alleges that the Company failed to maintain sufficient authorized capital to allow for conversion of the promissory notes; failed to honor conversion notices delivered with respect to the promissory notes; failed to file a registration statement with the U.S. Securities and Exchange Commission with respect to shares issuable on conversion of the promissory notes and failed to properly disclose the existence of the promissory notes and relevant details in its filings with the U.S. Securities and Exchange Commission. River North Equity is seeking damages in the amount of at least $27,500 plus accrued interest and such other damages as may be proven at trial. As of the date of this Report, this matter has been settled and dismissed. Claims by TCA Global Credit Master Fund, L.P. On or about May 9, 2017, TCA Global Credit Master Fund, L.P. (“TCA”) filed a civil action in Broward County Florida against the Company and its subsidiaries regarding an outstanding balance due under a Senior Secured Debt Facility Agreement dated February 26, 2016. This facility was fully paid on December 7, 2017. In all other respects, the action with TCA has been settled and dismissed. Claims by American Express Bank FSB: On or about August 26, 2016 American Express Bank FSB (“American Express”) filed a civil complaint against DIQ and Scott Kaplan (an employee of the Company) in the District Court for Clark County, Nevada for approximately $336,726 due on a credit card issued to DIQ, which was allegedly guaranteed by Scott Kaplan, the vice president of business development for KSIX, LLC. This action was subsequently dismissed on July 19, 2017. While the Company was not a party to this action, ostensibly there could be an obligation on the part of the Company to indemnify Mr. Kaplan on this matter. As of this date, no claim for indemnification has been made against the Company and the Company seeks to resolve any issues relating to this matter on an amicable basis without incurring any liability. Failure to resolve this matter could potentially have a material adverse effect on the Company and its business. There is no guarantee that this matter can be resolved on any basis which is favorable to the Company. West Publishing v DigitizeIQ LLC. On or about September 28, 2017 West Publishing Corporation (“West Publishing”) filed a civil action in the Superior Court of the State of California County of San Diego, Central Division (Case# 37-201700034215-CU-CL-CTL) for breach of contract and open book account against the Company’s subsidiary DigitizeIQ, LLC (“DigitizeIQ”). West Publishingclaims an open account of $435,700 against DigitizeIQ from an account originating in 2014 wherein DigitizeIQ provided lead-generation services for West Publishing. The Company has retained counsel and will vigorously defend this action. The Company contends that the open book account claimed by West Publishing is an accounting error and that, in fact, West Publishing owes DigitizeIQ for verified lead generation services during the relevant period. This matter is still pending as of the date of this Report and the outcome cannot be predicted. |
Concentration
Concentration | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration | 14 CONCENTRATION Revenue from one customer represented 45% of total revenue for the year ended December 31, 2017. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15 SUBSEQUENT EVENTS The Company has evaluated events occurring subsequent to December 31, 2017 and through the date these financial statements were available to be issued and disclosure as following: 1) On January 4, 2018, Carter Matzinger voluntarily cancelled 10,778,761 shares of Company Common Stock he had previously held. 2) Between January 1, 2018 and March 31, 2018, the Company sold an additional 2,300,000 shares of Company Common Stock for gross proceeds of $460,000. 3) On March 29, 2018, the Company filed a Certificate of Amendment to its Certificate of Designations for its Series A Preferred Stock which increased the authorized Series A Preferred Stock from 10,000,000 shares to 13,000,000 shares. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates in the Presentation of Financial Statements | Use of estimates in the presentation of financial statements The preparation of financial statements in conformity with generally accepted accounting principles 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 net revenue and expenses during each reporting period. Actual results could differ from those estimates. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable and allowance for doubtful accounts Accounts receivable are generally due thirty days from the invoice date. The Company has a policy of reserving for uncollectible accounts based on their best estimate of the amount of profitable credit losses in its existing accounts receivable. The Company extends credit to its customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for potential bad debts if required. The Company determines whether an allowance for doubtful accounts is required by evaluation of specific accounts where information indicates the customer may have an inability to meet financial obligations. In these cases, the Company uses assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. The Company may also record a general allowance as necessary. Direct write-offs are taken in the period when the Company has exhausted their efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate that the Company should abandon such efforts. For the years ended December 31, 2017 and 2016, the Company reported $10,000 and $36,954 of bad debt expense, respectively. |
Credit Risk | Credit risk The Company had cash deposits in certain banks that at times may have exceeded the maximum insured by the Federal Deposit Insurance Corporation. The Company monitors the financial condition of the banks and has experienced no losses on these accounts. |
Earnings (Loss) Per Common Share | Earnings (loss) per common share The Company is required to report both basic earnings per share, which is based on the weighted-average number of common shares outstanding, and diluted earnings per share, which is based on the weighted-average number of common shares outstanding plus all potential dilutive shares outstanding. At December 31, 2017 and 2016, there were no potentially dilutive common stock equivalents. Accordingly, basic and diluted earnings (loss) per share are the same for each of the periods presented. |
Contingencies | Contingencies Certain conditions may exist as of the date financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. Company management and its legal counsel assess such contingencies related to legal proceeding that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or if probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed. |
Share-Based Compensation | Share-based compensation The Company accounts for share-based compensation in accordance with Financial Accounting Standards Board (“FASB”) ASC 718, “Compensation-Stock Compensation.” Under the fair value recognition provisions of this pronouncement, share-based compensation cost is measured at the grant date based on the fair value of the award, reduced as appropriate based on estimated forfeitures, and is recognized as expense over the applicable vesting period of the stock award using the accelerated method. The excess tax benefit associated with stock compensation deductions have not been recorded in additional paid-in capital. When evaluating whether an excess tax benefit has been realized, share based compensation deductions are not considered realized until NOLs are no longer sufficient to offset taxable income. Such excess tax benefits will be recorded when realized. |
Property and Equipment | Property and equipment Property and equipment and software development costs are stated at cost, less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over the life of the lease if it is shorter than the estimated useful life. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations. Computer and office equipment is generally three to five years and office furniture is generally seven years. |
Business Combinations | Business combinations We allocate the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed 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 users, 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. |
Goodwill | Goodwill Goodwill is recognized for the excess of the purchase price over the fair value of tangible and identifiable intangible net assets of businesses acquired. Goodwill is not being amortized, but is reviewed at least annually for impairment. In our evaluation of goodwill impairment, we perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not conclusive, we proceed to a two-step process to test goodwill for impairment including comparing the fair value of the reporting unit to its carrying value (including attributable goodwill). Fair value for our reporting units is determined using an income or market approach incorporating market participant considerations and management’s assumptions on revenue growth rates, operating margins, discount rates and expected capital expenditures. Fair value determinations may include both internal and third-party valuations. Unless circumstances otherwise dictate, we perform our annual impairment testing in the fourth quarter. We perform the allocation based on our knowledge of the market in which we operate, and our overall knowledge of the industry. |
Revenue Recognition | Revenue recognition The Company recognizes revenue in accordance with Accounting Standard Codification (“ASC”) 605-10 (previously Securities and Exchange Commission Staff Accounting Bulletin No. 104, Revenue Recognition). Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The Company’s revenues are derived from online advertising sales and on a cost per lead (“CPL”) basis. Revenue from advertisers on a CPL basis is recognized in the period the leads are accepted by the client, following the execution of a service agreement and commencement of the services. |
Deferred Revenue | Deferred revenue DIQ generally requires prepayment of the initial contract amount in advance of services being performed. As such, the advance payment is deferred as a current liability until DIQ delivers the surveys contracted. At that time revenue is recognized and the deferred revenue liability is reduced. |
Fair Value Measurements | Fair value measurements The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: ● Level 1 — quoted prices in active markets for identical assets or liabilities. ● Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable. ● Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions). The derivative liability in connection with the conversion feature of the convertible debt, classified as a Level 3 liability, is the only financial liability measure at fair value on a recurring basis. The change in the Level 3 financial instrument is as follows: 2017 2016 Balance, beginning of year $ 584,168 $ - Issued during the year 22,368 1,226,020 Converted (1,017,840 ) (373,616 ) Change in fair value recognized in operations 504,201 (268,236 ) Balance, end of year $ 92,897 $ 584,168 The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model, using the following assumptions as of December 31, 2017 and December 31, 2016: 2017 2016 Estimanted dividends None None Expected volatility 179.55 % 261.35 % Risk free interest rate 2.58 % 2.79 % Expected term 0.01-36 months 0.01-36 months |
Convertible Instruments | Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. |
Advertising Costs | Advertising costs Advertising costs are expensed as incurred in accordance with ASC 720-35 “Advertising Costs”. The Company incurred advertising costs of $2,255 and $73,924 for the years ended December 31, 2017 and 2016, respectively, which are included in selling, general and administrative expenses on the Company’s consolidated financial statements. |
Income Taxes | Income taxes We use the asset and liability method of accounting for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. 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 the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. Through December 23, 2014, KSIX and BLVD operated as limited liability companies and all income and losses were passed through to the owners. Through October 12, 2015, DIQ operated as a limited liability company and all income and losses were passed through to its owner. Subsequent to the acquisition dates, these limited liability companies were owned by Surge and became subject to income tax. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented. |
Asset Impairment and Disposal of Long-lived Assets | Asset impairment and disposal of long-lived assets Long-lived assets, such as property, equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets or asset groups to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of the asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized equal to the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. Assets to be disposed would be presented separately in the Consolidated Balance Sheet. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year’s presentation. |
Recent Accounting Pronouncements | Recent accounting pronouncements In May 2016, FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients”. The update is to address certain issues identified by the FASB/IASB Joint Transition Resource Group for Revenue Recognition (TRG) in the guidance on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition, the Board decided to add a project to its technical agenda to improve Topic 606, Revenue from Contracts with Customers, by reducing: 1) the potential for diversity in practice at initial application and 2) the cost and complexity of applying Topic 606 both at transition and on an ongoing basis. The amendments in this Update affect entities with transactions included within the scope of Topic 606. The scope of that Topic includes entities that enter into contracts with customers to transfer goods or services (that are an output of the entity’s ordinary activities) in exchange for consideration. The amendments to the recognition and measurement provisions of Topic 606 also affect entities with transactions included within the scope of Topic 610, Other Income. The amendments in this Update affect the guidance in Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The adoption of this guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements and related disclosures. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, In May 2017, the FASB issued ASU 2017-09, “ Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” In December 2017, the Securities and Exchange Commission (“SEC”) released Staff Accounting Bulletin No. 118 (the “Bulletin”), which provides accounting guidance regarding accounting for income taxes for the reporting period that includes the enactment of the Tax Act. The Bulletin provides guidance in those situations where the accounting for certain income tax effects of the Tax Act will be incomplete by the time financial statements are issued for the reporting period that includes the enactment date. For those elements of the Tax Act that cannot be reasonably estimated, no effect will be recorded. The SEC has provided in the Bulletin that in situations where the accounting is incomplete for certain effects of the Tax Act, a measurement period which begins in the reporting period that includes the enactment of the Tax Act and ends when the entity has obtained, prepared and analyzed the information is needed in order to complete the accounting requirements. The measurement period shall not exceed one year from enactment. Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Change in Level 3 Financial Instrument | The change in the Level 3 financial instrument is as follows: 2017 2016 Balance, beginning of year $ 584,168 $ - Issued during the year 22,368 1,226,020 Converted (1,017,840 ) (373,616 ) Change in fair value recognized in operations 504,201 (268,236 ) Balance, end of year $ 92,897 $ 584,168 |
Schedule of Estimated Fair Value of Derivative Instruments Assumptions | The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model, using the following assumptions as of December 31, 2017 and December 31, 2016: 2017 2016 Estimanted dividends None None Expected volatility 179.55 % 261.35 % Risk free interest rate 2.58 % 2.79 % Expected term 0.01-36 months 0.01-36 months |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | After completing the appraisal (see Note 4), the Company made measurement period adjustments and recorded goodwill and specific intangible assets as follows. Term 2017 2016 DIQ customer relationships 5 years $ 183,255 $ 183,255 DIQ noncompetition agreement 2 years 201,389 201,389 384,644 384,644 Accumulated amortization 282,723 167,449 $ 101,921 $ 217,195 Asset impairment $ - $ 372,706 Amortization expense: $ 115,274 $ 430,128 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: 2017 2016 Equipment ¹ $ 166,107 $ 19,107 Accumulated depreciation 8,663 4,675 Net property and equipment $ 157,444 $ 14,432 Depreciation expense $ 3,988 $ 2,990 ¹ Includes costs related to equipment not placed in service as of December 31, 2017 and December 31, 2016 of $147,000 and $0, respectively. |
Long-Term Debt - Related Party
Long-Term Debt - Related Party (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long Term Debt Related Party | Long-term debt due to related parties consists of: December 31, 2017 December 31, 2016 Notes payable to SMDMM Funding, LLC; interest at 8% per annum; due on demand $ 285,000 $ - Notes payable to True Wireless, LLC; non-interest bearing; due on demand 19,000 - Note payable to director due in four equal annual installments of $26,875 on April 28 of each year - 107,500 304,000 107,500 Less current portion - related party - 53,750 Long-term debt - related party $ 304,000 $ 53,750 |
Notes Payable and Long-Term D27
Notes Payable and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable and Long-Term Debt | As of December 31, 2017, notes payable and long-term debt consists of: Note Balance Debt Discount Carrying Value On October 26, 2011, the Company entered into a note payable in the amount of $362,257, relating to a Unit redemption agreement bearing interest at 6% per annum and is payable in equal monthly installments of $7,003, inclusive of interest, past due. This note was settled for $10,000 in February 2018. $ 68,973 $ - $ 68,973 Note payable to former officer and director due in four equal annual installments of $26,875 beginning April 28, 2016; past due in 2016 and 2017; accruing interest at 6% per annum since April 28, 2016 on the past due portion 107,500 - 107,500 Note payable to former officer due in four equal annual installments of $25,313 on April 28 of each year; past due in 2016 and 2017; accruing interest at 6% per annum since April 28, 2016 on the past due portion 101,250 - 101,250 Notes payable to seller of DigitizeIQ, LLC due as noted below² 485,000 - 485,000 Convertible note payable to River North Equity LLC dated July 13, 2016 with interest at 10% per annum; due April 13, 2017; convertible into common stock 5 27,500 - 27,500 790,223 - 790,223 Less current portion 738,035 - 738,035 Long-term debt $ 52,188 $ - $ 52,188 As of December 31, 2016, notes payable and long-term debt consists of: Note Balance Debt Discount Carrying Value On October 26, 2011, the Company entered into a note payable in the amount of $362,257, relating to a Unit redemption agreement bearing interest at 6% per annum and is payable in equal monthly installments of $7,003, inclusive of interest, past due $ 68,973 $ - $ 68,973 Convertible Promissory Note - Non-interest bearing; on January 19, 2016, the Company modified the terms of a secured note payable in the original amount of $950,000 and made the $700,000 balance convertible 1 590,000 - 590,000 Note payable to former officer due in four equal annual installments of $25,313 on April 28 of each year; past due in 2016; accruing interest at 6% per annum since April 28, 2016 on past due portion 101,250 - 101,250 Notes payable to seller of DigitizeIQ, LLC due as noted below 2 485,000 - 485,000 Senior Secured Credit Facility dated February 24, 2016; interest at 18% per annum; interest only for two months then 16 payments of $28,306 monthly 3 261,043 - 261,043 Note payable to Calvary Fund I LP dated May 25, 2016 with interest at 18% 4 130,000 - 130,000 Convertible note payable to River North Equity LLC dated July 13, 2016 with interest at 10% per annum; due April 13, 2017; convertible into common stock 5 27,500 8,774 18,726 Convertible promissory notes payable to Salksanna, LLC dated October 7, 2016 and December 21, 2016 with interest at 10% per annum; due March 13, 2018; convertible into common stock 6 95,405 87,379 8,026 Working capital notes 7 183,757 - 183,757 1,942,928 96,153 1,846,775 Less current portion 1,796,898 8,774 1,788,124 Long-term debt $ 146,030 $ 87,379 $ 58,651 1 Convertible Promissory Note st th The original note and the convertible promissory note provide for semi-monthly payments of $10,000 due on the 1 st th In May 2017, the Company issued 6,257,459 shares of its common stock and in November 2017, the Company issued 1,750,000 shares of its common stock in exchange for the balance due on the note. 2 Notes due seller of DigitizeIQ, LLC includes a series of notes as follows ● A non-interest bearing Promissory Note made payable to the Seller in the amount of $250,000, which was due on November 12, 2015; (Paid February 26, 2016). ● A second non-interest bearing Promissory Note made payable to the Seller in the amount of $250,000, which was due on January 12, 2016; (Balance at December 31, 2016 - $235,000) ● A third non-interest bearing Promissory Note made payable to the Seller in the amount of $250,000, which was due on March 12, 2016 (Unpaid). The Company is renegotiating the terms of the notes. The notes bear interest at 5% per annum when in default (after the due date). The notes were non-interest bearing until due. Accordingly, a debt discount at 5% per annum was calculated for the notes and was amortized to interest expense until the due date of the notes. 3 Senior Secured Credit Facility Agreement - 6 6 The Senior Credit Facility includes a provision for advisory fees in the amount of $300,000 which was paid when the Company issued 1,782,000 shares of its common stock to TCA (the “Advisory Shares”) on or about March 24, 2016. If TCA is unable to collect the $300,000 from sales of the Advisory Shares within twelve months, the Company is obligated to issue additional shares to TCA until TCA is able to collect the full $300,000. Should TCA still be unable to collect the full $300,000, and after at least one year, TCA can require the Company to redeem any remaining shares for an amount equal to $300,000 less the sales proceeds that TCA has collected. In the event TCA sells the Advisory Shares for more than $300,000, the excess proceeds, together with unsold common shares will be returned to the Company. As long as there is no default under the terms of the Senior Credit Facility, TCA is limited to weekly sales of the Advisory Shares equal to no more than 20% of the average weekly volume of the Company’s common stock on its principal trading market. The stock was valued at the trading price on the date of the agreement and the resulting $300,000 was included as a direct reduction from the carrying amount of the debt liability and was fully amortized at December 31, 2016. The Convertible Note is convertible into the Common Stock of the Company upon the event of: (1) a default under any of the loan documents between the Company and TCA; or (2) mutual agreement between the Company and TCA, at which time TCA may convert all or a portion of the outstanding principal, accrued and unpaid interest into shares of the Common Stock of the Company calculated by the conversion amount divided by 85% of the lowest of the daily weighted average price of the Company’s Common Stock during five business days immediately prior to the date of the request of conversion (the “Conversion”). Pursuant to the terms of the Convertible Note, TCA is limited to beneficial ownership of not more than 4.99% of the issued and outstanding Common Stock of the Company after taking into effect the Common Stock to be issued pursuant to the Conversion. The TCA note was restructured effective August 29, 2016, September 29, 2016 and October 29, 2016 to accommodate the payment of the amounts due on those dates by Salksanna, LLC and the issue by the Company of convertible notes payable to Salksanna for the amounts of those payments. (See 6 The Company evaluated the resulting embedded conversion feature for derivative treatment and recorded an initial derivative liability and debt discount of $163,883. The debt discount was fully amortized at December 31, 2016. The Company was also responsible for other transaction, due diligence and legal fees of $42,500 if it borrowed the remaining $350,000 initially committed. The proceeds from the loan were used to pay a $250,000 note to the seller of DIQ and for working capital. The Company paid $375,000 in cash on December 7, 2017 in full payment of the note and the 1,782,000 shares held by TCA were returned to the Company and are included in treasury stock at December 31, 2017. 4 The payments due November 25, 2016 and December 25, 2016 were not made. As a result, the Company was penalized $30,000, which was added to the note balance and due to other past due obligations, it was determined the total balance was in default and due, making the note convertible. Accordingly, a debt discount for the derivative liability was recorded on November 25, 2016 for $52,889. At December 31, 2016, the debt discount was fully amortized. The Company issued 100,000 shares of its common stock on January 24, 2017; 310,675 shares of its common stock on March 8, 2017; 512,128 shares of its common stock on October 16, 2017; and 260,000 shares of its common stock on November 15, 2017 in full payment of the note. 5 The Company has entered into a number of agreements with RNE wherein RNE has agreed to invest up to $3,000,000 in the common stock of the Company. These agreements require an effective Registration Statement to be on file by the Company and would allow the Company to require RNE to purchase the Company’s common stock at 70% of the lowest trading price of the Company’s common stock during the previous twenty-one trading days. The Company has not yet filed a Registration Statement with the SEC. 6 At December 31, 2016, the remaining notes with a principal balance of $95,405 had a debt discount of $87,379. On December 7, 2017, the Company paid $110,000 in cash in full payment of the balances due on the notes. 7 |
Schedule of Estimated Fair Value Assumptions Used in Black-Scholes Option Pricing Model | The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model, using the following assumptions: December 31, 2017 December 31, 2016 Estimated dividends None None Expected volatility 178.98% to 238.94% 194.65% to 273.69% Risk free interest rate 2.58% to 2.89% 1.77% to 2.86% Expected term 0.01 to 36 months 0.01 to 36 months |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision (Benefit) | The income tax provision (benefit) consists of the following: 2017 2016 Federal: Current $ - $ - Deferred (403,900 ) (1,267,100 ) Change in valuation allowance 403,900 1,267,100 $ - $ - |
Reconciliation of Income Taxes Using Statutory U.S. Income Tax Rate and Benefits from Income Taxes | The expected tax benefit based on the statutory rate is reconciled with actual tax benefit as follows: 2017 2016 U.S. federal statutory rate -34.0 % -34.0 % State income tax, net of federal benefit 0.0 % 0.0 % Increase (decrease) in valuation allowance 34.0 % 34.0 % 0.0 % 0.0 % |
Components of Deferred Tax Assets and Related Valuation Allowances | Deferred tax assets consist of the effects of temporary differences attributable to the following: 2017 2016 Deferred tax assets Net operating losses $ 1,943,700 $ 1,621,400 Option compensation accrual 184,000 102,400 Deferred tax assets 2,127,700 1,723,800 Valuation allowance (2,127,700 ) (1,723,800 ) Deferred tax assets, net of valuation allowance $ - $ - |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Assumption Used Value of Options | The following assumptions were used to value the options: Expected term 4 years Expected average volatility 398.18 % Expected dividend yield 0 % Risk-free interest rate 1.44 % Expected annual forfeiture rate 0 % |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Transaction | The activity is summarized as follows: December 31, 2017 December 31, 2016 Balance at beginning of period $ 356,502 $ 318,002 New advances 34,000 40,000 Repayment (1,000 ) (1,500 ) Balance at end of period $ 389,502 $ 356,502 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contingent Consideration | At the date of this filing, the Company’s investment in TW consists of the following: Shares Amount Consideration paid: Cash paid $ 500,000 Common stock issued 12,000,000 1,200,000 Total consideration paid 12,000,000 $ 1,700,000 Consideration to be paid: Common stock to be issued at closing 151,707,516 $ 60,683,006 Series A Preferred Stock to be issued at closing 3,000,000 120,000 Note payable due December 31, 2018 1,500,000 Total consideration to be paid $ 62,303,006 Total consideration $ 64,003,006 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Bad debt expense | $ 10,000 | $ 36,954 |
Advertising costs | $ 2,255 | $ 73,924 |
Computer and Office Equipment [Member] | Minimum [Member] | ||
Property and equipment useful life | 3 years | |
Computer and Office Equipment [Member] | Maximum [Member] | ||
Property and equipment useful life | 5 years | |
Office Furniture [Member] | ||
Property and equipment useful life | 7 years |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Schedule of Change in Level 3 Financial Instrument (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Balance, beginning of year | $ 584,168 | |
Issued during the year | 22,368 | 1,226,020 |
Converted | (1,017,840) | (373,616) |
Change in fair value recognized in operations | 504,201 | (268,236) |
Balance, end of year | $ 92,897 | $ 584,168 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Schedule of Estimated Fair Value of Derivative Instruments Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Estimated dividends | ||
Expected volatility | 179.55% | 261.35% |
Risk free interest rate | 2.58% | 2.79% |
Minimum [Member] | ||
Expected term | 4 days | 4 days |
Maximum [Member] | ||
Expected term | 36 months | 36 months |
Going Concern (Details Narrativ
Going Concern (Details Narrative) | Dec. 31, 2017USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Working capital deficiency | $ 2,166,906 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible assets impairment adjustment recorded | $ 372,706 | |
BLVD [Member] | ||
Intangible assets impairment adjustment recorded | $ 372,706 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cost | $ 384,644 | $ 384,644 |
Accumulated amortization | 282,723 | 167,449 |
Balance | 101,921 | 217,195 |
Asset impairment | 372,706 | |
Amortization expense | $ 115,274 | 430,128 |
DIQ Customer Relationships [Member] | ||
Intangible assets, term | 5 years | |
Cost | $ 183,255 | 183,255 |
DIQ Noncompetition Agreement [Member] | ||
Intangible assets, term | 2 years | |
Cost | $ 201,389 | $ 201,389 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Property, Plant and Equipment [Abstract] | |||
Equipment | [1] | $ 166,107 | $ 19,107 |
Accumulated depreciation | 8,663 | 4,675 | |
Net property and equipment | 157,444 | 14,432 | |
Depreciation expense | $ 3,988 | $ 2,990 | |
[1] | Includes costs related to equipment not placed in service as of December 31, 2017 and December 31, 2016 of $147,000 and $0, respectively. |
Property and Equipment - Sche39
Property and Equipment - Schedule of Property and Equipment (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Costs related to equipment not placed in service | $ 147,000 | $ 0 |
Credit Card Liability (Details
Credit Card Liability (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 26, 2016 |
Debt Disclosure [Abstract] | |||
Credit card liability | $ 336,726 | $ 336,726 | $ 336,726 |
Long-Term Debt - Related Part41
Long-Term Debt - Related Party (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Apr. 28, 2015 | |
Due date | Payments due April 28, 2016 and 2017 | ||
Accrue interest precentage | 6.00% | ||
Common stock conversion price percentage | 70.00% | ||
Accrued interest | $ 1,711 | $ 1,088 | |
Four Equal Annual Payments [Member] | |||
Promissory note of annual payments | $ 26,875 | ||
Director [Member] | |||
Promissory note | $ 107,500 |
Long-Term Debt - Related Part42
Long-Term Debt - Related Party - Schedule of Long Term Debt Related Party (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term debt - related party gross | $ 304,000 | $ 107,500 |
Less current portion - related party | 304,000 | 53,750 |
Long-term debt - related party | 53,750 | |
Notes Payable to SMDMM Funding, LLC [Member] | ||
Long-term debt - related party gross | 285,000 | |
Notes Payable to True Wireless, LLC [Member] | ||
Long-term debt - related party gross | 19,000 | |
Notes Payable to Director [Member] | ||
Long-term debt - related party gross | $ 107,500 |
Long-Term Debt - Related Part43
Long-Term Debt - Related Party - Schedule of Long Term Debt Related Party (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Note payable interest rate per annum | 6.00% | |
Notes Payable to SMDMM Funding, LLC [Member] | ||
Note payable interest rate per annum | 8.00% | |
Notes Payable to True Wireless, LLC [Member] | ||
Note payable interest rate per annum | 0.00% | |
Notes Payable to Director [Member] | ||
Note payable due date | Apr. 28, 2017 | Apr. 28, 2016 |
Note payable annual installments | $ 26,875 | $ 26,875 |
Note payable installments due | four equal annual installments | four equal annual installments |
Notes Payable and Long-Term D44
Notes Payable and Long-Term Debt (Details Narrative) - USD ($) | Dec. 07, 2017 | Nov. 15, 2017 | Oct. 16, 2017 | Mar. 08, 2017 | Jan. 25, 2017 | Jan. 24, 2017 | Dec. 25, 2016 | Nov. 25, 2016 | Sep. 22, 2016 | May 23, 2016 | Apr. 01, 2016 | Mar. 24, 2016 | Mar. 23, 2016 | Feb. 24, 2016 | Jan. 19, 2016 | Nov. 30, 2017 | May 31, 2017 | Nov. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Percentage of lowest of daily weighted average price | 70.00% | |||||||||||||||||||
Number of common stock shares issued for debt conversion | 454,545 | 9,823,544 | ||||||||||||||||||
Debt bearing interest per annum | 6.00% | |||||||||||||||||||
Loan advance | $ 33,000 | $ 38,500 | ||||||||||||||||||
Debt instrument maturity date description | Payments due April 28, 2016 and 2017 | |||||||||||||||||||
Number of shares issued for common stock, shares | 625,000 | 240,000 | 7,225,000 | |||||||||||||||||
Due diligence and legal fees | $ 42,500 | |||||||||||||||||||
Remaining borrowings | 350,000 | |||||||||||||||||||
Accrued interest | 1,711 | 1,088 | ||||||||||||||||||
Loss on debt settlement | $ 1,000,349 | (107,105) | ||||||||||||||||||
TCA Global Credit Master Fund, LP [Member] | ||||||||||||||||||||
Ownership percentage | 4.99% | |||||||||||||||||||
Notes payable | $ 25,146 | |||||||||||||||||||
Debt discount, amount | 163,883 | |||||||||||||||||||
DigitizeIQ, LLC [Member] | ||||||||||||||||||||
Payment of note payable | $ 250,000 | |||||||||||||||||||
Senior Secured Credit Facility Agreement [Member] | ||||||||||||||||||||
Percentage of lowest of daily weighted average price | 20.00% | |||||||||||||||||||
Line of credit maximum amount | $ 5,000,000 | |||||||||||||||||||
Advisory fees | $ 300,000 | |||||||||||||||||||
Number of shares issued for common stock, shares | 1,782,000 | |||||||||||||||||||
Proceeds from sale of common stock | $ 300,000 | |||||||||||||||||||
Notes [Member] | ||||||||||||||||||||
Debt bearing interest per annum | 5.00% | |||||||||||||||||||
Debt discount, percentage | 5.00% | |||||||||||||||||||
Calvary Fund I, LP Note [Member] | ||||||||||||||||||||
Number of common stock shares issued for debt conversion | 260,000 | 512,128 | 310,675 | 100,000 | ||||||||||||||||
Convertible Note One [Member] | Salksanna LLC [Member] | ||||||||||||||||||||
Number of common stock shares issued for debt conversion | 1,953,399 | |||||||||||||||||||
Convertible promissory note | $ 53,452 | |||||||||||||||||||
Convertible Note Two [Member] | Salksanna LLC [Member] | ||||||||||||||||||||
Number of common stock shares issued for debt conversion | 383,525 | |||||||||||||||||||
Convertible promissory note | $ 53,452 | |||||||||||||||||||
Debt instruments principal amount | 11,500 | |||||||||||||||||||
Accrued interest | 44 | |||||||||||||||||||
Convertible Note [Member] | Salksanna LLC [Member] | ||||||||||||||||||||
Loss on debt settlement | 107,104 | |||||||||||||||||||
Convertible Note Three [Member] | Salksanna LLC [Member] | ||||||||||||||||||||
Convertible promissory note | 95,405 | |||||||||||||||||||
Debt discount, amount | 87,379 | |||||||||||||||||||
Payment of note payable | $ 110,000 | |||||||||||||||||||
Four Working Capital Notes [Member] | ||||||||||||||||||||
Payable in equal monthly installments | $ 2,956 | |||||||||||||||||||
Debt instruments principal amount | $ 245,000 | |||||||||||||||||||
Non Interest Bearing Promissory Note Payable [Member] | ||||||||||||||||||||
Payable in equal monthly installments | $ 250,000 | |||||||||||||||||||
Debt instrument matures date | Nov. 12, 2015 | |||||||||||||||||||
Second Non Interest Bearing Promissory Note Payable [Member] | ||||||||||||||||||||
Payable in equal monthly installments | $ 250,000 | |||||||||||||||||||
Debt instrument matures date | Jan. 12, 2016 | |||||||||||||||||||
Second Non Interest Bearing Promissory Note Payable [Member] | Seller [Member] | ||||||||||||||||||||
Payable in equal monthly installments | 235,000 | |||||||||||||||||||
Third Non Interest Bearing Promissory Note Payable [Member] | ||||||||||||||||||||
Payable in equal monthly installments | $ 250,000 | |||||||||||||||||||
Debt instrument matures date | Mar. 12, 2016 | |||||||||||||||||||
Convertible Promissory Note [Member] | ||||||||||||||||||||
Number of common stock shares issued for debt conversion | 1,750,000 | 6,257,459 | ||||||||||||||||||
KSIX and BMG [Member] | ||||||||||||||||||||
Payable in equal monthly installments | $ 20,000 | 200,000 | ||||||||||||||||||
Debt instrument matures date | Apr. 30, 2016 | |||||||||||||||||||
Percentage of lowest of daily weighted average price | 45.00% | |||||||||||||||||||
KSIX and BMG [Member] | Maximum [Member] | ||||||||||||||||||||
Percentage of lowest of daily weighted average price | 45.00% | |||||||||||||||||||
KSIX and BMG [Member] | Minimum [Member] | ||||||||||||||||||||
Percentage of lowest of daily weighted average price | 35.00% | |||||||||||||||||||
KSIX and BMG [Member] | Due Within 90 Days [Member] | ||||||||||||||||||||
Payable in equal monthly installments | $ 100,000 | |||||||||||||||||||
Debt instrument matures date | Jan. 1, 2017 | |||||||||||||||||||
KSIX and BMG [Member] | 1st and 15th of Each Month [Member] | ||||||||||||||||||||
Payable in equal monthly installments | $ 10,000 | |||||||||||||||||||
Percentage of lowest of daily weighted average price | 45.00% | |||||||||||||||||||
KSIX and BMG [Member] | Within Sixty Days [Member] | ||||||||||||||||||||
Payable in equal monthly installments | $ 30,000 | |||||||||||||||||||
KSIX and BMG [Member] | 1st And 15th Month [Member] | ||||||||||||||||||||
Payable in equal monthly installments | $ 10,000 | |||||||||||||||||||
Debt instrument matures date | Jan. 1, 2017 | |||||||||||||||||||
KSIX and BMG [Member] | Within 90 Days of January 19, 2016 [Member] | ||||||||||||||||||||
Payable in equal monthly installments | $ 100,000 | |||||||||||||||||||
KSIX and BMG [Member] | Within 60 Days of March 23, 2016 [Member] | ||||||||||||||||||||
Payable in equal monthly installments | 30,000 | |||||||||||||||||||
TCA Global Credit Master Fund, LP [Member] | ||||||||||||||||||||
Payable in equal monthly installments | $ 28,306 | |||||||||||||||||||
Percentage of lowest of daily weighted average price | 85.00% | |||||||||||||||||||
Convertible promissory note | $ 750,000 | |||||||||||||||||||
Loan advance | $ 400,000 | |||||||||||||||||||
Interest rate | 18.00% | |||||||||||||||||||
Debt instrument maturity date description | The payment due August 29, 2016 was acquired by Salksanna LLC on September 13, 2016 (See 6 below). The payment due September 29, 2016 was acquired by Salksanna, LLC on October 7, 2016 and the payment due October 29, 2016 was acquired by Salksanna, LLC on December 21, 2016. | |||||||||||||||||||
Payment of note payable | $ 375,000 | |||||||||||||||||||
Number of shares returned and included in treasury stock | 1,782,000 | |||||||||||||||||||
Calvary Fund I, LP [Member] | ||||||||||||||||||||
Payable in equal monthly installments | $ 14,063 | $ 18,750 | $ 25,000 | |||||||||||||||||
Percentage of lowest of daily weighted average price | 65.00% | |||||||||||||||||||
Debt discount, amount | $ 52,889 | |||||||||||||||||||
Payments for penalties | $ 30,000 | |||||||||||||||||||
River North Equity, LLC [Member] | ||||||||||||||||||||
Percentage of lowest of daily weighted average price | 70.00% | |||||||||||||||||||
Debt discount, amount | $ 23,339 | |||||||||||||||||||
Amortization of debt discount | 8,774 | $ 8,774 | ||||||||||||||||||
Maximum invest of common stock value | $ 3,000,000 |
Notes Payable and Long-Term D45
Notes Payable and Long-Term Debt - Schedule of Notes Payable and Long-Term Debt (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |||
Long-term debt, current | $ 738,035 | $ 1,788,124 | |||
Debt Discount, Non Current | 0 | 87,379 | |||
Long-term debt | 52,188 | 58,651 | |||
Notes Payable and Long-term Debt One [Member] | |||||
Long term debt gross | 68,973 | 68,973 | |||
Debt Discount | |||||
Carrying value | 68,973 | 68,973 | |||
Notes Payable and Long-term Debt Two [Member] | |||||
Long term debt gross | 107,500 | 590,000 | [1] | ||
Debt Discount | [1] | ||||
Carrying value | 107,500 | 590,000 | [1] | ||
Notes Payable and Long-term Debt Three [Member] | |||||
Long term debt gross | 101,250 | 101,250 | |||
Debt Discount | |||||
Carrying value | 101,250 | 101,250 | |||
Notes Payable and Long-term Debt Four [Member] | |||||
Long term debt gross | [2] | 485,000 | 485,000 | ||
Debt Discount | [2] | ||||
Carrying value | [2] | 485,000 | 485,000 | ||
Notes Payable and Long-term Debt Five [Member] | |||||
Long term debt gross | 27,500 | [3] | 261,043 | [4] | |
Debt Discount | [3] | [4] | |||
Carrying value | 27,500 | [3] | 261,043 | [4] | |
Notes Payable and Long Term Debt [Member] | |||||
Long term debt gross | 790,223 | 1,942,928 | |||
Debt Discount | 96,153 | ||||
Carrying value | 790,223 | 1,846,775 | |||
Notes Payable and Long-Term Debt, Current | 738,035 | 1,796,898 | |||
Debt Discount, Current | 8,774 | ||||
Long-term debt, current | 738,035 | 1,788,124 | |||
Notes Payable and Long-Term Debt, Non Current | 52,188 | 146,030 | |||
Debt Discount, Non Current | 87,379 | ||||
Long-term debt | $ 52,188 | 58,651 | |||
Notes Payable and Long-term Debt Six [Member] | |||||
Long term debt gross | [5] | 130,000 | |||
Debt Discount | [5] | ||||
Carrying value | [5] | 130,000 | |||
Notes Payable and Long-term Debt Seven [Member] | |||||
Long term debt gross | [3] | 27,500 | |||
Debt Discount | [3] | 8,774 | |||
Carrying value | [3] | 18,726 | |||
Notes Payable and Long-term Debt Eight [Member] | |||||
Long term debt gross | [6] | 95,405 | |||
Debt Discount | [6] | 87,379 | |||
Carrying value | [6] | 8,026 | |||
Working Capital Notes [Member] | |||||
Long term debt gross | [7] | 183,757 | |||
Debt Discount | [7] | ||||
Carrying value | [7] | $ 183,757 | |||
[1] | The Convertible Promissory Note was modified on January 19, 2016 to release the pledge of the holder’s former membership units in Ksix and BLVD, to make the note convertible into the Company’s common stock and to require an extra payment of $100,000 due within 90 days. The terms of the Convertible Note provided in the event the Note was not paid prior to the Maturity Date (January 1, 2017) or that payments are not made to the holder by the due date ($10,000 on the 1st and 15th of each month), the holder shall have the right thereafter, exercisable in whole or in part, to convert the outstanding principal or payment then due into shares of the common stock of the Company. The Convertible Promissory Note provided the note conversion price was determined by taking the lowest closing price of the Company’s common stock in the previous ten trading days and then applying a 45% discount. On March 23, 2016, the parties entered into an Addendum to the Convertible Promissory Note to allow an immediate conversion of the $20,000 payments due in April 2016 at the 45% discount rate; to modify the conversion discount rate from 45% to 35% for any future conversions; and to require an additional payment of $30,000 within sixty days. The Company evaluated the embedded conversion feature for derivative treatment and the debt discount is fully amortized at December 31, 2016.The original note and the convertible promissory note provide for semi-monthly payments of $10,000 due on the 1st and 15th of the month, with any unpaid balance due on January 1, 2017. If the Company paid the unpaid balance on December 31, 2016, they were allowed a discount of $200,000 from the remaining balance. In addition, the modification and addendum, provided for two additional payments during 2016. Within 90 days of January 19, 2016, the Company was required to make an additional payment of $100,000 and within 60 days of March 23, 2016, the Company was required to make an additional payment of $30,000. As of January 1, 2017 the total balance is past due.In May 2017, the Company issued 6,257,459 shares of its common stock and in November 2017, the Company issued 1,750,000 shares of its common stock in exchange for the balance due on the note. | ||||
[2] | Notes due seller of DigitizeIQ, LLC includes a series of notes as follows:A non-interest bearing Promissory Note made payable to the Seller in the amount of $250,000, which was due on November 12, 2015; (Paid February 26, 2016).A second non-interest bearing Promissory Note made payable to the Seller in the amount of $250,000, which was due on January 12, 2016; (Balance at December 31, 2016 - $235,000)A third non-interest bearing Promissory Note made payable to the Seller in the amount of $250,000, which was due on March 12, 2016 (Unpaid).The Company is renegotiating the terms of the notes. The notes bear interest at 5% per annum when in default (after the due date). The notes were non-interest bearing until due. Accordingly, a debt discount at 5% per annum was calculated for the notes and was amortized to interest expense until the due date of the notes. | ||||
[3] | Convertible note payable to River North Equity, LLC (“RNE”)- The Company evaluated the embedded conversion for derivative treatment and recorded an initial derivative liability and debt discount of $23,339. The debt discount has been amortized to a balance of $8,774 at December 31, 2016 and at December 31, 2017, the debt discount is fully amortized.The Company has entered into a number of agreements with RNE wherein RNE has agreed to invest up to $3,000,000 in the common stock of the Company. These agreements require an effective Registration Statement to be on file by the Company and would allow the Company to require RNE to purchase the Company’s common stock at 70% of the lowest trading price of the Company’s common stock during the previous twenty-one trading days. The Company has not yet filed a Registration Statement with the SEC. | ||||
[4] | Senior Secured Credit Facility Agreement - On February 24, 2016, the Company executed a Senior Secured Credit Facility Agreement (“Senior Credit Facility”) in the maximum amount of $5,000,000 together with a Convertible Promissory Note (“Convertible Note”) in the amount of $750,000 with TCA Global Credit Master Fund, LP (“TCA”). The initial loan advance was $400,000 and requires monthly interest only payments for two months and then sixteen monthly payments of $28,306, including interest at 18% per annum. The obligation is secured by substantially all assets of the Company and its subsidiaries. The payment due August 29, 2016 was acquired by Salksanna LLC on September 13, 2016 (See 6 below). The payment due September 29, 2016 was acquired by Salksanna, LLC on October 7, 2016 and the payment due October 29, 2016 was acquired by Salksanna, LLC on December 21, 2016. (See 6 below).The Senior Credit Facility includes a provision for advisory fees in the amount of $300,000 which was paid when the Company issued 1,782,000 shares of its common stock to TCA (the “Advisory Shares”) on or about March 24, 2016. If TCA is unable to collect the $300,000 from sales of the Advisory Shares within twelve months, the Company is obligated to issue additional shares to TCA until TCA is able to collect the full $300,000. Should TCA still be unable to collect the full $300,000, and after at least one year, TCA can require the Company to redeem any remaining shares for an amount equal to $300,000 less the sales proceeds that TCA has collected. In the event TCA sells the Advisory Shares for more than $300,000, the excess proceeds, together with unsold common shares will be returned to the Company. As long as there is no default under the terms of the Senior Credit Facility, TCA is limited to weekly sales of the Advisory Shares equal to no more than 20% of the average weekly volume of the Company’s common stock on its principal trading market. The stock was valued at the trading price on the date of the agreement and the resulting $300,000 was included as a direct reduction from the carrying amount of the debt liability and was fully amortized at December 31, 2016.The Convertible Note is convertible into the Common Stock of the Company upon the event of: (1) a default under any of the loan documents between the Company and TCA; or (2) mutual agreement between the Company and TCA, at which time TCA may convert all or a portion of the outstanding principal, accrued and unpaid interest into shares of the Common Stock of the Company calculated by the conversion amount divided by 85% of the lowest of the daily weighted average price of the Company’s Common Stock during five business days immediately prior to the date of the request of conversion (the “Conversion”). Pursuant to the terms of the Convertible Note, TCA is limited to beneficial ownership of not more than 4.99% of the issued and outstanding Common Stock of the Company after taking into effect the Common Stock to be issued pursuant to the Conversion.The TCA note was restructured effective August 29, 2016, September 29, 2016 and October 29, 2016 to accommodate the payment of the amounts due on those dates by Salksanna, LLC and the issue by the Company of convertible notes payable to Salksanna for the amounts of those payments. (See 6 below.) The restructured note to TCA added $25,146 to each payment for the loan fee originally paid with common stock. When the fee is paid in full, the 1,782,000 shares will be returned to the Company. The payments due TCA on November 29, 2016 and December 29, 2016 are currently unpaid and this default resulted in the note becoming convertible into common stock of the Company.The Company evaluated the resulting embedded conversion feature for derivative treatment and recorded an initial derivative liability and debt discount of $163,883. The debt discount was fully amortized at December 31, 2016.The Company was also responsible for other transaction, due diligence and legal fees of $42,500 if it borrowed the remaining $350,000 initially committed.The proceeds from the loan were used to pay a $250,000 note to the seller of DIQ and for working capital.The Company paid $375,000 in cash on December 7, 2017 in full payment of the note and the 1,782,000 shares held by TCA were returned to the Company and are included in treasury stock at December 31, 2017. | ||||
[5] | Calvary Fund I, LP Note – The Calvary note payable was due in installments of $25,000 plus accrued interest on November 25, 2016; $18,750 plus accrued interest on December 25, 2016; $14,063 plus accrued interest on January 25, 2017 and a final payment of the unpaid balance plus accrued interest on May 25, 2017. The agreement provides for limitations on additional indebtedness. If an event of default, as defined in the agreement, occurs and if not cured within ten days, the note becomes convertible into the Company’s common stock at a rate equal to 65% of the average VWAP over the previous 5 trading days. If the event of default is for non-payment of any installment due, the amount convertible is limited to the amount of the unpaid installment. Pinz Capital is controlled by a director of the Company. Calvary Fund I, LP acquired the note from Pinz Capital in December 2016.The payments due November 25, 2016 and December 25, 2016 were not made. As a result, the Company was penalized $30,000, which was added to the note balance and due to other past due obligations, it was determined the total balance was in default and due, making the note convertible. Accordingly, a debt discount for the derivative liability was recorded on November 25, 2016 for $52,889. At December 31, 2016, the debt discount was fully amortized.The Company issued 100,000 shares of its common stock on January 24, 2017; 310,675 shares of its common stock on March 8, 2017; 512,128 shares of its common stock on October 16, 2017; and 260,000 shares of its common stock on November 15, 2017 in full payment of the note. | ||||
[6] | The Company issued three convertible notes to Salksanna, LLC in exchange for payments made by Salksanna to TCA. The first note in the amount of $53,452 was converted into 1,953,399 shares of the Company’s common stock. The second note in the original amount of $53,452 was partially converted with $11,500 in principal and $44 in accrued interest converted into 383,525 shares of the Company’s common stock. The conversion of the first note and the partial conversion of the second note resulted in a loss on debt extinguishment of $107,104.At December 31, 2016, the remaining notes with a principal balance of $95,405 had a debt discount of $87,379. On December 7, 2017, the Company paid $110,000 in cash in full payment of the balances due on the notes. | ||||
[7] | In November 2016, the Company entered into four working capital notes in the original amount of $245,000 which require daily payments aggregating $2,956. The notes were paid in full during 2017. |
Notes Payable and Long-Term D46
Notes Payable and Long-Term Debt - Schedule of Notes Payable and Long-Term Debt (Details) (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Jun. 29, 2017 | |
Debt bearing interest per annum | 6.00% | ||
Convertible promissory note | $ 177,500 | ||
Notes Payable and Long-term Debt One [Member] | |||
Debt instruments principal amount | $ 362,257 | $ 362,257 | |
Debt bearing interest per annum | 6.00% | 6.00% | |
Payable in equal monthly installments | $ 7,003 | $ 7,003 | |
Notes Payable and Long-term Debt One [Member] | February 2018 [Member] | |||
Settlement amount | 10,000 | ||
Notes Payable and Long-term Debt Two [Member] | |||
Debt original amount | 950,000 | ||
Convertible promissory note | $ 700,000 | ||
Notes Payable and Long-term Debt Two [Member] | April 28, 2016 [Member] | |||
Payable in equal monthly installments | $ 26,875 | ||
Notes Payable and Long-term Debt Four [Member] | April 28, 2016 [Member] | |||
Debt bearing interest per annum | 6.00% | ||
Notes Payable and Long-term Debt Three [Member] | |||
Debt bearing interest per annum | 6.00% | 6.00% | |
Payable in equal monthly installments | $ 25,313 | $ 25,313 | |
Notes Payable and Long-term Debt Five [Member] | |||
Debt bearing interest per annum | 10.00% | 18.00% | |
Payable in equal monthly installments | $ 28,306 | ||
Debt instrument matures date | Apr. 13, 2017 | ||
Notes Payable and Long-term Debt Six [Member] | |||
Debt bearing interest per annum | 18.00% | ||
Notes Payable and Long-term Debt Seven [Member] | |||
Debt bearing interest per annum | 10.00% | ||
Debt instrument matures date | Apr. 13, 2017 | ||
Notes Payable and Long-term Debt Eight [Member] | |||
Debt bearing interest per annum | 10.00% | ||
Debt instrument matures date | Mar. 13, 2018 |
Notes Payable and Long-Term D47
Notes Payable and Long-Term Debt - Schedule of Estimated Fair Value Assumptions Used in Black-Scholes Option Pricing Model (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Expected volatility | 179.55% | 261.35% |
Risk free interest rate | 2.58% | 2.79% |
Minimum [Member] | ||
Expected term | 4 days | 4 days |
Maximum [Member] | ||
Expected term | 36 months | 36 months |
Derivative Liability [Member] | ||
Estimated dividends | ||
Derivative Liability [Member] | Minimum [Member] | ||
Expected volatility | 178.98% | 194.65% |
Risk free interest rate | 2.58% | 1.77% |
Expected term | 4 days | 4 days |
Derivative Liability [Member] | Maximum [Member] | ||
Expected volatility | 238.94% | 273.69% |
Risk free interest rate | 2.89% | 2.86% |
Expected term | 36 months | 36 months |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net operating loss carry forwards | $ 6,000,000 | |
Operating loss carryforwards expiration date description | expire commencing in fiscal 2034. | |
Reduce tax rate | 0.00% | 0.00% |
Tax Reform Bill [Member] | ||
Reduce tax rate | 21.00% | |
Income tax reconciliation description | Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21% and creates new taxes on certain foreign-sourced earnings and certain related-party payments, which are referred to as the global intangible low-taxed income tax and the base erosion tax, respectively. The Tax Act requires us to pay U.S. income taxes on accumulated foreign subsidiary earnings not previously subject to U.S. income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets and 8% on the remaining earnings. |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Provision (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Current | ||
Deferred | (403,900) | (1,267,100) |
Change in valuation allowance | 403,900 | 1,267,100 |
Income Tax Benefit |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes Using Statutory U.S. Income Tax Rate and Benefits from Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory rate | (34.00%) | (34.00%) |
State income tax, net of federal benefit | 0.00% | 0.00% |
Increase (decrease) in valuation allowance | 34.00% | 34.00% |
Effective income tax rates | 0.00% | 0.00% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Related Valuation Allowances (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets, Net operating losses | $ 1,943,700 | $ 1,621,400 |
Deferred tax assets, Option compensation accrual | 184,000 | 102,400 |
Deferred tax assets | 2,127,700 | 1,723,800 |
Valuation allowance | (2,127,700) | (1,723,800) |
Deferred tax assets, net of valuation allowance |
Stockholder's Equity (Details N
Stockholder's Equity (Details Narrative) - USD ($) | Mar. 24, 2017 | Nov. 23, 2016 | Oct. 26, 2016 | Oct. 06, 2016 | Sep. 22, 2016 | Sep. 19, 2016 | Aug. 17, 2016 | Jun. 10, 2016 | May 23, 2016 | May 13, 2016 | May 10, 2016 | May 06, 2016 | Apr. 18, 2016 | Apr. 05, 2016 | Apr. 01, 2016 | Mar. 24, 2016 | Feb. 24, 2016 | Feb. 01, 2016 | Jan. 04, 2016 | Nov. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 10, 2017 | Aug. 31, 2017 | Sep. 16, 2016 | May 30, 2016 |
Number of authorized shares | 600,000,000 | |||||||||||||||||||||||||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||||||||||||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | |||||||||||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||
Preferred stock, shares issued | 10,000,000 | |||||||||||||||||||||||||
Preferred stock, shares outstanding | 10,000,000 | |||||||||||||||||||||||||
Common stock, shares issued | 90,057,445 | 57,343,901 | ||||||||||||||||||||||||
Common stock, shares outstanding | 88,275,445 | 57,343,901 | ||||||||||||||||||||||||
Number of shares issued for common stock, shares | 625,000 | 240,000 | 7,225,000 | |||||||||||||||||||||||
Number of shares issued for common stock | $ 50,000 | $ 38,688 | $ 1,175,000 | |||||||||||||||||||||||
Common shares in exchange for convertible note payable, shares | 454,545 | 9,823,544 | ||||||||||||||||||||||||
Common shares in exchange for convertible note payable | $ 20,000 | $ 1,916,441 | ||||||||||||||||||||||||
Common stock issued for services, shares | 3,150,000 | 3,665,000 | ||||||||||||||||||||||||
Common stock issued for services | $ 516,600 | $ 940,173 | $ 1,407,788 | |||||||||||||||||||||||
Common stock in exchange for cash, shares | 250,000 | 100,000 | ||||||||||||||||||||||||
Common stock in exchange for cash | $ 20,000 | $ 10,000 | ||||||||||||||||||||||||
Number of common stock shares compensation | 239,984 | 301,133 | ||||||||||||||||||||||||
Option to purchase, value | $ 959,940 | |||||||||||||||||||||||||
Performance Based Stock Options [Member] | ||||||||||||||||||||||||||
Number of common stock shares compensation | 3,000,000 | |||||||||||||||||||||||||
Performance Based Stock Options [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||||||||||||||||||||||
Revenues | $ 10,000,000 | |||||||||||||||||||||||||
Vesting period | 3 years | |||||||||||||||||||||||||
Stock option vesting price per share | $ 0.12 | |||||||||||||||||||||||||
Stock option to purchase shares common stock vested | 1,000,000 | |||||||||||||||||||||||||
Performance Based Stock Options [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||||||||||||||||||||||||
Revenues | $ 15,000,000 | |||||||||||||||||||||||||
Vesting period | 3 years | |||||||||||||||||||||||||
Stock option vesting price per share | $ 0.30 | |||||||||||||||||||||||||
Stock option to purchase shares common stock vested | 1,000,000 | |||||||||||||||||||||||||
Performance Based Stock Options [Member] | Share-based Compensation Award, Tranche Three [Member] | ||||||||||||||||||||||||||
Revenues | $ 20,000,000 | |||||||||||||||||||||||||
Vesting period | 3 years | |||||||||||||||||||||||||
Stock option vesting price per share | $ 0.50 | |||||||||||||||||||||||||
Stock option to purchase shares common stock vested | 1,000,000 | |||||||||||||||||||||||||
Time Based Stock Options [Member] | ||||||||||||||||||||||||||
Number of common stock shares compensation | 3,000,000 | |||||||||||||||||||||||||
Time Based Stock Options [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||||||||||||||||||||||
Revenues | $ 1,000,000 | |||||||||||||||||||||||||
Vesting period | 3 years | |||||||||||||||||||||||||
Stock option vesting price per share | $ 0.12 | |||||||||||||||||||||||||
Time Based Stock Options [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||||||||||||||||||||||||
Revenues | $ 1,000,000 | |||||||||||||||||||||||||
Vesting period | 3 years | |||||||||||||||||||||||||
Stock option vesting price per share | $ 0.30 | |||||||||||||||||||||||||
Time Based Stock Options [Member] | Share-based Compensation Award, Tranche Three [Member] | ||||||||||||||||||||||||||
Revenues | $ 1,000,000 | |||||||||||||||||||||||||
Vesting period | 3 years | |||||||||||||||||||||||||
Stock option vesting price per share | $ 0.50 | |||||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||||
Common stock issued for services, shares | 3,665,000 | 7,890,000 | ||||||||||||||||||||||||
Common stock issued for services | $ 3,665 | $ 7,890 | ||||||||||||||||||||||||
Warrants exercise price per share | $ 0.50 | $ 0.50 | ||||||||||||||||||||||||
Share price | $ 0.10 | $ 0.10 | ||||||||||||||||||||||||
Number of common stock shares compensation | ||||||||||||||||||||||||||
Convertible Note Payable [Member] | ||||||||||||||||||||||||||
Common shares in exchange for convertible note payable, shares | 1,953,399 | |||||||||||||||||||||||||
Common shares in exchange for convertible note payable | $ 53,452 | |||||||||||||||||||||||||
Accrued interest | $ 5,345 | |||||||||||||||||||||||||
Convertible Note Payable One [Member] | ||||||||||||||||||||||||||
Common shares in exchange for convertible note payable, shares | 383,525 | |||||||||||||||||||||||||
Common shares in exchange for convertible note payable | $ 11,500 | |||||||||||||||||||||||||
Accrued interest | $ 44 | |||||||||||||||||||||||||
Common Stock and OneHalf Warrant [Member] | ||||||||||||||||||||||||||
Number of shares issued for common stock, shares | 5,975,000 | 5,975,000 | ||||||||||||||||||||||||
Number of shares issued for common stock | $ 597,500 | $ 597,500 | ||||||||||||||||||||||||
Master Agreement [Member] | ||||||||||||||||||||||||||
Number of shares issued for common stock, shares | 12,000,000 | |||||||||||||||||||||||||
Fair market value | $ 1,200,000 | |||||||||||||||||||||||||
Legal Services Agreement [Member] | ||||||||||||||||||||||||||
Common stock issued for services, shares | 250,000 | |||||||||||||||||||||||||
Common stock issued for services | $ 112,500 | |||||||||||||||||||||||||
Consulting Agreement [Member] | ||||||||||||||||||||||||||
Stock options based value | $ 180,000 | |||||||||||||||||||||||||
Common stock issued for services, shares | 1,000,000 | 250,000 | ||||||||||||||||||||||||
Common stock issued for services | $ 180,000 | $ 30,000 | ||||||||||||||||||||||||
Senior Secured Credit Facility Agreement [Member] | ||||||||||||||||||||||||||
Number of shares issued for common stock, shares | 1,782,000 | |||||||||||||||||||||||||
Number of common stock shares issued for advisory fees | 1,782,000 | |||||||||||||||||||||||||
Number of common stock issued for advisory fees value | $ 300,000 | |||||||||||||||||||||||||
Two Year Consulting Agreement [Member] | ||||||||||||||||||||||||||
Stock options based value | $ 190,000 | |||||||||||||||||||||||||
Number of shares issued for common stock, shares | 1,000,000 | |||||||||||||||||||||||||
Number of shares issued for common stock | $ 190,000 | |||||||||||||||||||||||||
Subscription Agreement [Member] | ||||||||||||||||||||||||||
Number of shares issued for common stock, shares | 1,800,000 | |||||||||||||||||||||||||
Number of shares issued for common stock | $ 180,000 | |||||||||||||||||||||||||
One Year Consulting Agreement [Member] | ||||||||||||||||||||||||||
Common stock issued for services, shares | 1,000,000 | |||||||||||||||||||||||||
Common stock issued for services | $ 100,000 | |||||||||||||||||||||||||
Compensation with a cashless warrant | 1,500,000 | |||||||||||||||||||||||||
Warrant value included in repaid expense and additional paid in capital | $ 389,699 | |||||||||||||||||||||||||
6 Month Consulting Contract [Member] | ||||||||||||||||||||||||||
Common stock issued for services, shares | 1,000,000 | |||||||||||||||||||||||||
Common stock issued for services | $ 50,000 | |||||||||||||||||||||||||
Unit Subscription Agreement [Member] | ||||||||||||||||||||||||||
Warrants exercise price per share | $ 0.75 | |||||||||||||||||||||||||
Share price | $ 0.10 | |||||||||||||||||||||||||
Number of common stock shares compensation | 3,200,000 | |||||||||||||||||||||||||
Option to purchase, value | $ 320,000 | |||||||||||||||||||||||||
Unit Subscription Agreement With Bcan Holdings LLC [Member] | ||||||||||||||||||||||||||
Warrants exercise price per share | $ 0.50 | |||||||||||||||||||||||||
Share price | $ 0.08 | |||||||||||||||||||||||||
Number of common stock shares compensation | 3,375,000 | |||||||||||||||||||||||||
Option to purchase, value | $ 270,000 | |||||||||||||||||||||||||
Unit Subscription Agreement With Seventeen Unrelated Companies and Individuals [Member] | ||||||||||||||||||||||||||
Warrants exercise price per share | $ 0.50 | $ 0.50 | ||||||||||||||||||||||||
Share price | $ 0.10 | $ 0.10 | ||||||||||||||||||||||||
Unit Subscription Agreements [Member] | ||||||||||||||||||||||||||
Warrants exercise price per share | $ 0.50 | $ 0.50 | ||||||||||||||||||||||||
Share price | $ 0.20 | $ 0.10 | ||||||||||||||||||||||||
Offered individual purchase of warrants | 4,525,000 | 2,700,000 | ||||||||||||||||||||||||
Individual purchase of warrants value | $ 905,000 | $ 270,000 | ||||||||||||||||||||||||
Unit Subscription Agreements [Member] | Warrants [Member] | ||||||||||||||||||||||||||
Offered individual purchase of warrants | 2,262,500 | 1,350,000 | ||||||||||||||||||||||||
Maximum [Member] | Unit Subscription Agreement [Member] | Individual [Member] | ||||||||||||||||||||||||||
Offered individual purchase of warrants | 5,000,000 | |||||||||||||||||||||||||
Individual purchase of warrants value | $ 500,000 | |||||||||||||||||||||||||
Maximum [Member] | Unit Subscription Agreement With Bcan Holdings LLC [Member] | Individual [Member] | ||||||||||||||||||||||||||
Offered individual purchase of warrants | 4,000,000 | |||||||||||||||||||||||||
Individual purchase of warrants value | $ 320,000 | |||||||||||||||||||||||||
Minimum [Member] | Unit Subscription Agreement [Member] | ||||||||||||||||||||||||||
Offered individual purchase of warrants | 1,800,000 | |||||||||||||||||||||||||
Individual purchase of warrants value | $ 180,000 | |||||||||||||||||||||||||
Minimum [Member] | Unit Subscription Agreement [Member] | Individual [Member] | ||||||||||||||||||||||||||
Offered individual purchase of warrants | 1,800,000 | |||||||||||||||||||||||||
Individual purchase of warrants value | $ 180,000 | |||||||||||||||||||||||||
Minimum [Member] | Unit Subscription Agreement With Bcan Holdings LLC [Member] | ||||||||||||||||||||||||||
Offered individual purchase of warrants | 625,000 | |||||||||||||||||||||||||
Individual purchase of warrants value | $ 50,000 | |||||||||||||||||||||||||
Individual [Member] | Minimum [Member] | Unit Subscription Agreement With Bcan Holdings LLC [Member] | ||||||||||||||||||||||||||
Offered individual purchase of warrants | 625,000 | |||||||||||||||||||||||||
Individual purchase of warrants value | $ 50,000 | |||||||||||||||||||||||||
Parties [Member] | Unit Subscription Agreement With Seventeen Unrelated Companies and Individuals [Member] | ||||||||||||||||||||||||||
Offered individual purchase of warrants | 5,975,000 | 5,975,000 | ||||||||||||||||||||||||
Individual purchase of warrants value | $ 597,500 | $ 597,500 | ||||||||||||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||||||||||||
Preferred stock, shares authorized | 10,000,000 | |||||||||||||||||||||||||
Preferred stock, par value | $ 0.001 | |||||||||||||||||||||||||
Percentage of preferred shares outstanding to modify provisions | 75.00% | |||||||||||||||||||||||||
Series A Preferred Stock [Member] | March 29, 2018 [Member] | ||||||||||||||||||||||||||
Preferred stock, shares authorized | 10,000,000 | |||||||||||||||||||||||||
Series A Preferred Stock [Member] | March 29, 2018 [Member] | Maximum [Member] | ||||||||||||||||||||||||||
Preferred stock, shares authorized | 13,000,000 | |||||||||||||||||||||||||
Series A Preferred Stock [Member] | Carter Matzinger [Member] | ||||||||||||||||||||||||||
Preferred stock, par value | $ 0.001 | |||||||||||||||||||||||||
Preferred stock, shares issued | 10,000,000 | |||||||||||||||||||||||||
Preferred stock shares designation | 10,000,000 | |||||||||||||||||||||||||
Preferred stock shares issued upon conversion | 10 | |||||||||||||||||||||||||
Common stock based on the market price | $ 0.19 | |||||||||||||||||||||||||
Stock options based value | $ 190,000 | |||||||||||||||||||||||||
Common stock issued for services, shares | 10,000,000 |
Stockholder's Equity - Schedule
Stockholder's Equity - Schedule of Assumption Used Value of Options (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Expected term | 4 years |
Expected average volatility | 398.18% |
Expected dividend yield | 0.00% |
Risk-free interest rate | 1.44% |
Expected annual forfeiture rate | 0.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Sep. 22, 2016 | Jun. 10, 2016 | May 23, 2016 | May 10, 2016 | May 06, 2016 | Apr. 05, 2016 | Feb. 01, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Number of shares issued for services | 3,150,000 | 3,665,000 | |||||||
Number of shares issued for preferred stock, shares | 625,000 | 240,000 | 7,225,000 | ||||||
Number of shares issued for services, value | $ 516,600 | $ 940,173 | $ 1,407,788 | ||||||
Consulting Agreement [Member] | |||||||||
Number of shares issued for services | 1,000,000 | 250,000 | |||||||
Number of shares issued for services, value | $ 180,000 | $ 30,000 | |||||||
Axia Management, LLC [Member] | |||||||||
Reimbursed for the actual amount charges | 138,556 | ||||||||
CenterCom, LLC. [Member] | |||||||||
Cash payment | $ 6,678 | ||||||||
Preferred Stock [Member] | |||||||||
Number of shares issued for services | 10,000,000 | ||||||||
Number of shares issued for preferred stock, shares | 190,000 | ||||||||
Number of shares issued for services, value | $ 10,000 | ||||||||
Chief Operating Officer and Director [Member] | Consulting Agreement [Member] | |||||||||
Number of shares issued for services | 1,000,000 | ||||||||
Number of shares issued for services, value | $ 190,000 | ||||||||
Agreement amortized term | 2 years | ||||||||
Series A Preferred Stock [Member] | Carter Matzinger [Member] | |||||||||
Number of shares issued for services | 10,000,000 |
Related Party Transactions - Su
Related Party Transactions - Summary of Related Party Transaction (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | ||
Balance at beginning of Period | $ 356,502 | $ 318,002 |
New advances | 34,000 | 40,000 |
Repayments | (1,000) | (1,500) |
Balance at end of Period | $ 389,502 | $ 356,502 |
Commitments and Contingencies56
Commitments and Contingencies (Details Narrative) - USD ($) | Jul. 18, 2017 | Sep. 22, 2016 | May 23, 2016 | Dec. 31, 2017 |
Number of shares issued for common stock, shares | 625,000 | 240,000 | 7,225,000 | |
True Wireless, LLC [Member] | ||||
Notes payable | $ 1,500,000 | |||
Number of shares issued for common stock, shares | 12,000,000 | |||
Series A Preferred Stock [Member] | March 30, 2018 [Member] | Equity Closing [Member] | ||||
Number of shares issued for common stock, shares | 3,000,000 | |||
Equity Closing [Member] | March 30, 2018 [Member] | ||||
Number of shares issued for common stock, shares | 12,000,000 | |||
Equity Closing [Member] | March 30, 2018 [Member] | True Wireless, LLC [Member] | ||||
Number of shares issued for common stock, shares | 151,707,516 | |||
Cash payment | $ 500,000 | |||
Debt instrument interest percentage | 69.50% | |||
Share base compensation vesting period percentage | 69.50% | |||
Amended Exchange Agreement and Management Agreement [Member] | ||||
Number of shares issued for common stock, shares | 114,000,000 | |||
Warrants to purchase common stock shares | 45,000,000 | |||
Warrant terms | 5 years | |||
Purchase price | $ 0.50 | |||
Amended Exchange Agreement and Management Agreement [Member] | Equity Closing [Member] | ||||
Number of stock issued during cancellation of common stock shares | 14,000,000 | |||
Amended Exchange Agreement and Management Agreement [Member] | BrianCox [Member] | ||||
Number of shares issued for common stock, shares | 12,000,000 | |||
Percentage ownership of company common stock | 69.50% | |||
Amended Exchange Agreement and Management Agreement [Member] | Carter Matzinger's [Member] | Series A Preferred Stock [Member] | ||||
Percentage ownership of company common stock | 100.00% | |||
Majority common stock voting rights | 75.00% | |||
Amended Exchange Agreement and Management Agreement [Member] | Carter Matzinger [Member] | Equity Closing [Member] | ||||
Number of stock issued during cancellation of common stock shares | 14,000,000 | |||
Merger Agreement [Member] | Equity Closing [Member] | March 30, 2018 [Member] | True Wireless, LLC [Member] | ||||
Stock issued during period shares acquisition | 12,000,000 | |||
Deposit on acquisition | $ 500,000 | |||
Promissory Note [Member] | ||||
Notes payable | $ 1,500,000 | |||
Promissory Note [Member] | Equity Closing [Member] | March 30, 2018 [Member] | ||||
Debt instrument interest percentage | 3.00% | |||
Debt instrument original face amount | $ 3,000,000 | |||
Debt instrument matures date | Dec. 31, 2018 | |||
Promissory Note [Member] | Management Agreement [Member] | BrianCox [Member] | ||||
Promissory note, principal amount | $ 1,500,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Contingent Consideration (Details) - USD ($) | Sep. 22, 2016 | May 23, 2016 | Dec. 31, 2017 |
Common stock issued, shares | 625,000 | 240,000 | 7,225,000 |
Common stock issued, Value | $ 50,000 | $ 38,688 | $ 1,175,000 |
True Wireless, LLC [Member] | |||
Cash paid | $ 500,000 | ||
Common stock issued, shares | 12,000,000 | ||
Common stock issued, Value | $ 1,200,000 | ||
Total consideration paid, shares | 12,000,000 | ||
Total consideration paid, value | $ 1,700,000 | ||
Common stock to be issued at closing, shares | 151,707,516 | ||
Common stock to be issued at closing | $ 60,683,006 | ||
Series A Preferred Stock to be issued at closing, shares | 3,000,000 | ||
Series A Preferred Stock to be issued at closing | $ 120,000 | ||
Note payable due December 31, 2018 | 1,500,000 | ||
Total consideration to be paid | 62,303,006 | ||
Total consideration | $ 64,003,006 |
Commitments and Contingencies58
Commitments and Contingencies - Schedule of Contingent Consideration (Details) (Parenthetical) - True Wireless, LLC [Member] | Dec. 31, 2017$ / shares |
Common Stock to be issued at closing at an average price per share | $ 0.40 |
Series A Preferred Stock to be issued at closing at an average price | $ 0.04 |
Litigation (Details Narrative)
Litigation (Details Narrative) - USD ($) | Sep. 28, 2017 | Jun. 29, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 26, 2016 |
Commitments and Contingencies Disclosure [Abstract] | |||||
Convertible promissory notes | $ 177,500 | ||||
Seeking damages amount | $ 27,500 | ||||
Credit card liability | $ 336,726 | $ 336,726 | $ 336,726 | ||
Claims amount | $ 435,700 |
Concentration (Details Narrativ
Concentration (Details Narrative) | 12 Months Ended |
Dec. 31, 2017 | |
One Customer [Member] | |
Concentration risk percentage | 45.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jan. 04, 2018 | Mar. 31, 2018 | Mar. 29, 2018 | Dec. 31, 2017 | Oct. 10, 2017 | Dec. 31, 2016 | May 06, 2016 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||
Series A Preferred Stock [Member] | |||||||
Preferred stock, shares authorized | 10,000,000 | ||||||
Subsequent Event [Member] | |||||||
Sale of additional stock | 2,300,000 | ||||||
Proceeds from common stock gross proceeds | $ 460,000 | ||||||
Subsequent Event [Member] | Series A Preferred Stock [Member] | |||||||
Preferred stock, shares authorized | 10,000,000 | ||||||
Subsequent Event [Member] | Series A Preferred Stock [Member] | Maximum [Member] | |||||||
Preferred stock, shares authorized | 13,000,000 | ||||||
Subsequent Event [Member] | Carter Matzinger [Member] | |||||||
Number of stock issued during cancellation of common stock shares | 10,778,761 |