Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Apr. 15, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | INFORMATION SYSTEMS ASSOCIATES, INC. | |
Entity Central Index Key | 1396536 | |
Document Type | 10-K | |
Document Period End Date | 31-Dec-14 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Public Float | $0 | |
Entity Common Stock, Shares Outstanding | 62,500,000 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2014 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Cash and cash equivalents | $3,478 | $166 |
Accounts receivable, net | 39,289 | 26,696 |
Prepaid expenses | 29,792 | |
Total Current Assets | 42,767 | 56,654 |
Property and Equipment, net | 1,618 | 12,591 |
Other assets | 1,690 | |
TOTAL ASSETS | 44,385 | 70,935 |
Accounts payable | 238,459 | 246,528 |
Accrued payroll | 156,250 | 31,646 |
Note payable - related party | 293,084 | 330,087 |
Note payable - shareholder | 50,000 | 50,000 |
Notes payable (Convertible OID) - related parties | 66,000 | 66,000 |
Notes payable (OID) - net of discounts, shareholder | 151,031 | 142,684 |
Notes payable (Third Party), net of discount | 79,616 | 45,000 |
Line of credit | 37,996 | 39,979 |
Deferred revenue | 6,879 | 31,182 |
Accrued interest | 13,407 | 20,380 |
Total Current Liabilities | 1,092,722 | 1,003,486 |
Commitments and contingencies (Note 12) | ||
Preferred stock $.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2014 and 2013, respectively | ||
Common Stock $.001 par value, 500,000,000 shares authorized, 690,779, and 454,710, issued and outstanding as of December 31, 2014 and 2013, respectively | 691 | |
Additional paid in capital | 5,038,476 | 4,519,238 |
Common Stock to be Issued - 5,000 and 41,663 shares as of December 31, 2014 and 2013, respectively | 5 | 42 |
Subscription receivable | -100,000 | |
Accumulated deficit | -6,087,509 | -5,352,286 |
Total Stockholders' Deficit | -1,048,337 | -932,551 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $44,385 | $70,935 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock -shares authorized | 500,000,000 | 500,000,000 |
Common stock -shares issued | 690,779 | 454,710 |
Common stock -shares outstanding | 690,779 | 454,710 |
Common stock - shares to be issued | 5,000 | 41,663 |
Commitments and contingencies (Note 2) |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | ||
Software and Hardware Sales | $102,720 | $74,814 |
Services | 298,591 | 532,782 |
Total Revenue | 401,311 | 607,596 |
Software and Hardware | 68,429 | 12,361 |
Services | 99,864 | 263,884 |
Total Cost of Revenue | 168,293 | 276,245 |
Gross Profit | 233,018 | 331,351 |
Administrative and General | 236,132 | 235,446 |
Salaries and Employee Benefits | 369,093 | 456,067 |
Professional Fees | 57,583 | 94,273 |
Total Operating Expenses | 662,808 | 785,786 |
Loss from Operations | -429,790 | -454,435 |
Finance Fee earned on sales | 9,231 | |
Gain on settlement | 5,200 | 13,981 |
Factoring fees and other interest | -14,032 | -25,667 |
Loss on note conversion | -150,274 | |
Loss on Fixed Asset Disposal | -5,122 | |
Interest Expense | -141,205 | -191,677 |
Total Other Income(Expense), net | -305,433 | -194,132 |
Net Loss | ($735,223) | ($648,567) |
Basic and Fully Diluted (Loss) per share | ($1.25) | ($1.67) |
Weighted Avg Common shares outstanding | 588,730 | 389,355 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Cash Flows [Abstract] | ||
Net Loss | ($735,223) | ($648,567) |
Depreciation | 4,126 | 5,715 |
Amortization of prepaid consulting shares for services | 29,792 | 29,708 |
Amortization of discounts | 25,071 | 69,588 |
Gain on Settlement | -5,200 | -13,981 |
Officers contributed salaries | 608 | 194,958 |
Options issued for services | 59,810 | 16,388 |
Bad Debt Expense | 5,490 | |
Expense for warrant term modifications | 31,500 | |
Interest and default penalty on convertible note | 24,063 | |
Loss on Fixed Asset Disposal | 5,122 | |
Loss on debt conversion | 150,274 | |
Accounts receivable | -12,593 | 3,522 |
Prepaids | 5,439 | |
Other assets | 1,690 | 3,000 |
Accounts payable | 17,391 | 85,243 |
Accounts payable - related party | -6,156 | |
Accrued payroll | 124,604 | 31,647 |
Accrued interest | 60,911 | 8,872 |
Deferred revenue | -24,303 | -7,263 |
Net Cash Used In Operating Activities | -297,920 | -160,834 |
Proceeds from sale of property and equipment | 1,725 | |
Net Cash Provided by Investing Activities | 1,725 | |
Proceeds (Repayments) from checks written in excess of cash balances | -3,880 | |
Proceeds from notes - related parties | 127,618 | 175,597 |
Repayments of notes - related parties | -75,512 | -74,534 |
Proceeds from shareholder | 60,000 | |
Repayment of third party notes | -23,016 | |
Repayment of convertible notes, shareholders | -14,932 | |
Proceeds from factor, net of repayments | -24,587 | |
Insurance premium repayments | -4,613 | |
Proceeds from line of credit facility | 41,469 | 39,981 |
Repayments of line of credit facility | -43,452 | -37,032 |
Proceeds from third party note | 62,400 | 45,000 |
Proceeds from sales of stock | 210,000 | |
Net Cash Provided by Financing Activities | 299,507 | 161,000 |
Net Change in Cash and Cash Equivalents | 3,312 | 166 |
Cash and Cash Equivalents at Beginning of year | 166 | |
Cash and Cash Equivalents at End of year | 3,478 | 166 |
Cash paid for interest | 108,898 | 87,592 |
Cash paid for taxes | ||
Conversion of convertible notes and accrued interest | 106,563 | |
Reclassification of accounts payable to notes payable, related party | 20,000 | |
Conversion of accounts payable to common stock | 6,800 | |
Conversion of note payable | 180,045 | |
Warrants issued in note modification | 11,900 | |
Original issued discount | 27,332 | |
Common stock issued for prepaid services | 59,500 | |
Third party payment on convertible notes | $6,540 |
Consoliated_Statement_of_Chang
Consoliated Statement of Changes in Shareholders Deficit (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Beginning Balance - Amount | ($932,551) | ($754,726) |
Stock issued for services Amount | 59,500 | |
Stock option expense Amount | 16,388 | |
Warrants Reset expense Amount | 31,500 | |
Shares for additional investment Amount | 1,833 | |
Conversoin of notes payable Amount | 106,564 | |
Shares for cash investment Amount | 60,000 | |
Warrant cashless exercise value | ||
Warrants issued in note extension value | -11,900 | |
Warrants issued in note conversion | 77,997 | |
Stock Option Expense | ||
Receipt of subscription receivable | 120,000 | |
Shares for cash investments value | 90,000 | |
Issuance of previosly issuable shares value | ||
Conversion of note payable - related party value | 100,000 | |
Contributed capital | 608 | |
Shares issued with debt assignment value | 152,322 | |
Conversion of accounts payable to common stock value | 6,800 | |
Ending Balance - amount | -1,048,337 | -932,551 |
Net Loss - Value | -735,223 | -648,567 |
Preferred Stock | ||
Beginning Balance - shares | ||
Beginning Balance - Amount | ||
Stock issued for services Shares | ||
Stock issued for services Amount | ||
Warrant cashless exercise shares | ||
Warrants issued in note extension value | ||
Warrants issued in note conversion | ||
Stock Option Expense | ||
Receipt of subscription receivable | ||
Shares for cash investments | ||
Issuance of previously issuable shares | ||
Conversion of note payable - related party | ||
Shares issued with debt assignment | ||
Conversion of accounts payable to common stock | ||
Ending Balance - Shares | ||
Net Loss - Value | ||
Common Stock | ||
Beginning Balance - shares | 454,710 | 343,991 |
Beginning Balance - Amount | 455 | 344 |
Stock issued for services Shares | -52,500 | |
Stock issued for services Amount | 53 | |
Shares for additional investment Shares | 1,250 | |
Shares for additional investment Amount | 1 | |
Conversoin of notes payable Shares | 31,969 | |
Conversoin of notes payable Amount | 32 | |
Shares for cash investment Shares | 25,000 | |
Shares for cash investment Amount | 25 | |
Warrant cashless exercise shares | ||
Warrants issued in note extension value | ||
Warrants issued in note conversion | ||
Stock Option Expense | ||
Receipt of subscription receivable | ||
Shares for cash investments | 20,831 | |
Shares for cash investments value | 21 | |
Issuance of previously issuable shares | 88,918 | |
Issuance of previosly issuable shares value | 89 | |
Conversion of note payable - related party | 41,667 | |
Conversion of note payable - related party value | 41 | |
Shares issued with debt assignment | 84,653 | |
Shares issued with debt assignment value | 85 | |
Conversion of accounts payable to common stock | ||
Ending Balance - Shares | 690,779 | 454,710 |
Ending Balance - amount | 691 | 455 |
Net Loss - Value | ||
CommonStockIssuable | ||
Beginning Balance - shares | 41,663 | |
Beginning Balance - Amount | 42 | |
Shares for cash investment Shares | 41,663 | |
Shares for cash investment Amount | 42 | |
Warrant cashless exercise shares | 22,255 | |
Warrant cashless exercise value | 22 | |
Warrants issued in note extension value | ||
Warrants issued in note conversion | ||
Stock Option Expense | ||
Receipt of subscription receivable | ||
Shares for cash investments | 25,000 | |
Shares for cash investments value | 25 | |
Issuance of previously issuable shares | -88,918 | |
Issuance of previosly issuable shares value | -89 | |
Conversion of note payable - related party value | ||
Conversion of accounts payable to common stock | 5,000 | |
Conversion of accounts payable to common stock value | 5 | |
Ending Balance - Shares | 5,000 | 41,663 |
Ending Balance - amount | 5 | 42 |
Net Loss - Value | ||
Additional Paid-In Capital | ||
Beginning Balance - Amount | 4,519,238 | 3,948,649 |
Stock issued for services Amount | 59,447 | |
Stock option expense Amount | 16,388 | |
Warrants Reset expense Amount | 31,500 | |
Shares for additional investment Amount | 1,832 | |
Conversoin of notes payable Amount | 106,532 | |
Shares for cash investment Amount | 159,932 | |
Warrant cashless exercise value | -22 | |
Warrants issued in note extension value | 11,900 | |
Warrants issued in note conversion | 77,997 | |
Stock Option Expense | 59,810 | |
Receipt of subscription receivable | ||
Shares for cash investments value | 109,954 | |
Issuance of previosly issuable shares value | ||
Conversion of note payable - related party value | 99,959 | |
Contributed capital | 608 | |
Shares issued with debt assignment value | 152,237 | |
Conversion of accounts payable to common stock value | 6,795 | |
Ending Balance - amount | 5,038,476 | 4,519,238 |
Net Loss - Value | ||
SubscriptionReceivable | ||
Beginning Balance - Amount | -100,000 | |
Stock issued for services Amount | ||
Shares for cash investment Amount | -100,000 | |
Warrant cashless exercise value | ||
Warrants issued in note extension value | ||
Warrants issued in note conversion | ||
Stock Option Expense | ||
Receipt of subscription receivable | 120,000 | |
Shares for cash investments value | -20,000 | |
Issuance of previosly issuable shares value | ||
Conversion of note payable - related party value | ||
Shares issued with debt assignment value | ||
Conversion of accounts payable to common stock value | ||
Ending Balance - amount | -100,000 | |
Net Loss - Value | ||
Retained Earnings / Accumulated Deficit | ||
Beginning Balance - Amount | -5,352,266 | -4,703,719 |
Stock issued for services Amount | ||
Warrant cashless exercise value | ||
Warrants issued in note extension value | ||
Warrants issued in note conversion | ||
Stock Option Expense | ||
Receipt of subscription receivable | ||
Shares for cash investments value | ||
Issuance of previosly issuable shares value | ||
Conversion of note payable - related party value | ||
Shares issued with debt assignment value | ||
Conversion of accounts payable to common stock value | ||
Ending Balance - amount | -6,087,509 | -5,352,266 |
Net Loss - Value | ($735,223) | ($648,567) |
NOTE_1_NATURE_OF_OPERATIONS_AN
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Notes to Financial Statements | |||||||||||
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||
Nature of Operations | |||||||||||
Information Systems Associates, Inc. (“ISA”) or (“The Company”) was incorporated in Florida on May 31, 1994 to engage in the business of developing software for the financial and asset management industries under the laws of the State of Florida. The Company currently derives the majority of its revenue from Mobile Data Center Management™ systems and turnkey data center management solutions to customers primarily located within the United States specializing in various industries. Our products and services include data center asset/inventory management, data center management software and data center data collection. | |||||||||||
We are currently engaged and plan to continue in the sale of asset management software for corporate information technology data centers and networks. ISA is a "solution provider" positioned to develop and deliver comprehensive asset management systems large data center assets. As part of a long term reorganization of the entity, the Company announced the formation of a new wholly owned subsidiary, TrueVue 360, Inc. TrueVue 360’s mission is to develop and market a new Software as a Service (SaaS) offering for IT asset management. TrueVue 360 will operate independently of the parent company, ISA, which will now focus exclusively on providing independent consulting and professional services through its partners to large data centers worldwide. ISA continues to receive excellent ratings for quality and efficiency. | |||||||||||
In addition, the Company continues to evaluate other related technology offerings and has entered into discussions with a new venture whose mission is to develop and market a new platform for “collaborative consumption”, a rapidly growing industry aimed at connecting individuals to services and products (see Note 18). | |||||||||||
Principles of Consolidation | |||||||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, TrueVue 360 Inc. All significant inter-company transactions and balances are eliminated in consolidation. | |||||||||||
Use of Estimates | |||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. Most significant estimates in the accompanying financial statements include the allowance on accounts receivable, valuation of deferred tax assets, valuation of warrants issued with debt, valuation of beneficial conversion features in convertible debt and valuation of stock-based awards. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. | |||||||||||
Cash and Cash Equivalents | |||||||||||
For the purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be a cash equivalent. | |||||||||||
Concentrations | |||||||||||
Cash Concentrations: | |||||||||||
Cash and cash equivalents are maintained at financial institutions and at times, balances may exceed federally insured limits. We have not experienced any losses related to these balances. There were no amounts on deposit in excess of federally insured limits at December 31, 2014 and 2013. | |||||||||||
Significant Customers and Concentration of Credit Risk: | |||||||||||
A significant portion of revenues is derived from certain customer relationships. The following is a summary of customers that each represents greater than 10% of total revenues in 2014 and 2013, and total accounts receivable at December 31, 2014 and 2013, respectively. | |||||||||||
2014 | 2013 | ||||||||||
Revenue | Accounts Receivable | Revenue | Accounts Receivable | ||||||||
Customer A | 66% | Customer A | 100% | Customer A | 49% | Customer A | 68% | ||||
Customer B | 17% | Customer B | 0% | Customer B | 18% | Customer B | 22% | ||||
Fair Value of Financial Instruments and Fair Value Measurements | |||||||||||
We measure our financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short maturities. Amounts recorded for notes payable, net of discount, and loans payable also approximate fair value because current interest rates available to us for debt with similar terms and maturities are substantially the same. | |||||||||||
We follow accounting guidance for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). | |||||||||||
The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: | |||||||||||
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. | |||||||||||
Level 2: Inputs, other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. | |||||||||||
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. | |||||||||||
Accounts Receivable and Factoring | |||||||||||
Accounts receivable are stated at estimated net realizable value. Accounts receivable are comprised of balances due from customers net of estimated allowances for uncollectible accounts. In determining the collections on the account, historical trends are evaluated and specific customer issues are reviewed to arrive at appropriate allowances. | |||||||||||
The Company accounts for the transfer of our accounts receivable to a third party in accordance with ASC 860-10-40-5 “Transfers and Servicing”. ASC 860-10 requires that several conditions be met in order to present the sale of accounts receivable net of related debt in the asset section of our balance sheet. Even though we have isolated the transferred (sold) assets and we have the legal right to transfer our assets (accounts receivable) we do not meet the third test of effective control since our accounts receivable sales agreement requires us to be liable in the event of default by one of our customers. Because we do not meet all three conditions, we do not qualify for sale treatment and our debt incurred with respect to the sale of our accounts receivable is presented as a secured loan liability on our balance sheet. | |||||||||||
Property and Equipment | |||||||||||
Property and equipment is stated at cost, less accumulated depreciation. Depreciation is provided by the straight-line method over the estimated economic life of the property and equipment (three to ten years). When assets are sold or retired, their costs and accumulated depreciation are eliminated from the accounts and any gain or loss resulting from their disposal is included in the statement of operations. Leasehold improvements are expensed over the term of our lease. | |||||||||||
The Company recognizes an impairment loss on property and equipment when evidence, such as the sum of expected future cash flows (undiscounted and without interest charges), indicates that future operations will not produce sufficient revenue to cover the related future costs, including depreciation, and when the carrying amount of the asset cannot be realized through sale. Measurement of the impairment loss is based on the fair value of the assets. | |||||||||||
Software Development Costs | |||||||||||
Internal Use Software: | |||||||||||
The Company accounts for costs incurred to develop or purchase computer software for internal use in accordance with FASB ASC 350-40 “Internal-Use Software” or ASC 350-50 "Website Costs". As required by ASC 350-40, the Company capitalizes the costs incurred during the application development stage, which include costs to design the software configuration and interfaces, coding, installation, and testing. | |||||||||||
Costs incurred during the preliminary project stage along with post-implementation stages of internal use computer software are expensed as incurred. Capitalized development costs are amortized over a period of one to three years. Costs incurred to maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs requires considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility, and estimated economic life. | |||||||||||
Software to be sold or leased: | |||||||||||
Costs incurred in connection with the development of software products are accounted for in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") 985-20 Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market and capitalization ceases after the general release of the software. Amortization of capitalized software development costs begins upon initial product shipment. Capitalized software development costs are amortized over the estimated life of the related product using the straight-line method. The Company evaluates its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such software assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software asset. | |||||||||||
Software maintenance costs are charged to expense as incurred. The cost of the software and the related accumulated amortization are removed from the accounts upon retirement of the software with any resulting loss being recorded in operations. | |||||||||||
Long-Lived Assets | |||||||||||
The Company evaluates the recoverability of its property, equipment, and other long-lived assets in accordance with FASB ASC 360 “Property, Plant and Equipment”, which requires recognition of impairment of long-lived assets in the event the net book value of such assets exceed the estimated future undiscounted cash flows attributable to such assets or the business to which such intangible assets relate. | |||||||||||
Revenue Recognition | |||||||||||
The Company recognizes revenue in accordance with Security Exchange Commission (SEC) Staff Accounting Bulletin No. 104, "Revenue Recognition" and Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 985-605-25 which addresses Revenue Recognition for the software industry. The general criteria for revenue recognition under ASC 985-605 for our Company which sells software licenses which do not require any significant modification or customization is that revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. | |||||||||||
The Company generates revenue from three sources: (1) Professional Services (consulting & auditing); (2) Software Licensing with optional hardware sales; and (3) Customer Service (training & maintenance/support). | |||||||||||
For sales arrangements that do not involve multiple elements: | |||||||||||
(1) Revenues for professional services, which are of short term duration, are recognized when services are completed, | |||||||||||
(2) Through December 31, 2014 software license sales have been one time sales of a perpetual license to use our software product and the customer also has the option to purchase third party manufactured handheld devices from us if they purchase our software license. Accordingly the revenue is recognized upon delivery of the software and delivery of the hardware, as applicable, to the customer, | |||||||||||
(3) Training sales are one time upfront short term training sessions and are recognized after the service has been performed, | |||||||||||
(4) Maintenance/support is an optional product sold to our software license customers under one year contracts. Accordingly, maintenance payments received upfront are deferred and recognized over the contract term. | |||||||||||
Arrangements with customers may involve multiple elements of the above sources. Training and maintenance on software products will generally occur after the software product sale while other services may occur before or after the software product sale and may not relate to the software product. | |||||||||||
Each element is accounted for separately when each element has value to the customer on a stand-alone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price for the items when sold separately. Once the selling price is allocated, the revenue for each element is recognized using the general and specific criteria under GAAP as discussed above for elements sold in non-multiple element arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company sells it various services and software and hardware products at established prices on a standalone basis which provides Company specific objective evidence of selling price for purposes of multiple element relative selling price allocation. All elements in multiple element arrangements with Company customers qualify as separate units of account for revenue recognition purposes. | |||||||||||
Sales Return Reserve Policy | |||||||||||
Our return policy generally allows our end users to return purchased hardware products for refund or in exchange for new products. We estimate a reserve for sales returns, if any, and record that reserve amount as a reduction of sales and as a sales return reserve liability. | |||||||||||
Warranty Reserve Policy | |||||||||||
The Company is a distributor of products and warranties are the responsibility of the manufacturer. Therefore the Company does not record a record a reserve for product warranty. | |||||||||||
Cost of Revenue | |||||||||||
Cost of revenue includes hardware costs, amortization of capitalized software and labor costs for services. | |||||||||||
Share-Based Compensation | |||||||||||
We follow the fair value recognition provisions of ASC 718, “Compensation – Stock Compensation”. The fair values of share-based payments are estimated on the date of grant using the Black-Scholes option pricing model, based on weighted average assumptions. Expected volatility is based on historical volatility of our common stock. We have elected to use the simplified method described in the Securities and Exchange Commission Staff Accounting Bulletin Topic 14C to estimate the expected term of employee stock options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. Compensation expense is recognized on a straight-line basis over the requisite service period of the award. | |||||||||||
The assumptions used in calculating the fair value of stock-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future. | |||||||||||
Income Taxes | |||||||||||
We use the asset and liability method to account for income taxes. Under this method, deferred income taxes are determined based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements which will result in taxable or deductible amounts in future years and are measured using the currently enacted tax rates and laws. A valuation allowance is provided to reduce net deferred tax assets to the amount that, based on available evidence, is more likely than not to be realized. | |||||||||||
The Company follows the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. | |||||||||||
Earnings (Loss) Per Share | |||||||||||
Basic earnings per share (EPS) are computed by dividing net (loss) by the weighted average number of common shares outstanding. The dilutive EPS adds the dilutive effect of stock options, warrants and other stock equivalents. As of December 31, 2014 and 2013, outstanding warrants to purchase an aggregate of 39,234,063 and 29,859,375 shares of common stock respectively and outstanding options to purchase 4,150,000 and 1,000,000 shares of common stock respectively were excluded from the computation of dilutive earnings per share because the inclusion would have been anti-dilutive. These warrants and options may dilute future earnings per share. The Company also has convertible debt convertible into 19,800 shares of common stock that may dilute future earnings. | |||||||||||
Recent Issued Accounting Standards | |||||||||||
Financial Accounting Standards Board, Accounting Standard Updates which are not effective until after December 31, 2014 are not expected to have a significant effect on the Company’s consolidated financial position or results of operations. | |||||||||||
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205-40)”, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the implementation of this standard to have a material effect on its disclosures. |
NOTE_2_GOING_CONCERN
NOTE 2 - GOING CONCERN | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NOTE 2 - GOING CONCERN | |
NOTE 2 – GOING CONCERN | |
As reflected in the accompanying unaudited financial statements, the Company had a net loss and cash used in operations for the year ended December 31, 2014 of $735,223 and $297,920 and the working capital deficit, stockholders’ deficit and accumulated deficit as of December 31, 2014 was $1,049,955, $1,048,337 and $6,087,509 respectively. These matters raise substantial doubt about the Company’s ability to continue as a going concern. | |
The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan and raise capital. Management has been obtaining short term loans from friends and family, postponement of salary payments by officers with subsequent forgiveness of accrued amounts and extensions on payments to certain suppliers. | |
Our management continues to engage in discussions with the capital markets to raise additional funds for expansion including software development and marketing. Our strategy is to grow revenues by looking for additional markets outside of our core business focus in addition to developing our software and customer services businesses (see Note 18). | |
Management believes that the actions presently being taken provide the opportunity for the Company to continue as a going concern. Ultimately, the continuation of the Company as a going concern is dependent upon the ability of the Company to generate sufficient revenue and to attain profitable operations. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
NOTE_3_ACCOUNTS_RECEIVABLE_AND
NOTE 3 - ACCOUNTS RECEIVABLE AND FACTORING | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
NOTE 3 - ACCOUNTS RECEIVABLE AND FACTORING | |||||||||
NOTE 3 – ACCOUNTS RECEIVABLE AND FACTORING | |||||||||
In December 2011 the Company entered into an agreement with a Factoring company whereby the Company will assign, in the Factor’s sole discretion, selected accounts receivable to the Factor in exchange for initial cash funding ("factor advances") for up to 80% of the factored receivable. The minimum 20% reserve held back by the Factor is released after collection of the account receivable by the Factor. The company pays a 3% factor fee for each factored receivable. Since the factoring agreement provides for full recourse against the Company for factored accounts receivable that are not collected by the Factor for any reason, and the collection of such accounts receivable are fully secured by substantially all assets of the Company, the factoring advances have been treated as secured loans on the accompanying balance sheets. The total accounts receivable factored in 2014 and 2013 was $479,248 and $479,248 respectively. The factor fees incurred in 2014 and 2013 were $14,032 and $25,667, respectively. The Company eliminated the use of Factoring in 2014 due to the high cost of this facility. Total outstanding accounts receivable factored at December 31, 2014 and 2013 which is included in Accounts Receivable on the accompanying balance sheets was $0 and $0, respectively. | |||||||||
The Company has total Accounts Receivable as of December 31, 2014 and 2013 as follows: | |||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Accounts Receivable | $ | 39,289 | $ | 32,186 | |||||
Factored Accounts Receivable | — | — | |||||||
Allowance for Doubtful Accounts | — | (5,490 | ) | ||||||
Accounts Receivable, net | $ | 39,289 | $ | 26,696 | |||||
NOTE_4_PROPERTY_AND_EQUIPMENT
NOTE 4 - PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
NOTE 4 - PROPERTY AND EQUIPMENT | |||||||||
NOTE 4 – PROPERTY AND EQUIPMENT | |||||||||
The Company has total Property and Equipment as follows: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Computer software (purchased) | $ | 590 | $ | 590 | |||||
Website development costs | 10,072 | 10,072 | |||||||
Furniture, fixtures, and equipment | 33,218 | 40,712 | |||||||
Leasehold improvements | 1,664 | 1,664 | |||||||
45,544 | 53,038 | ||||||||
Less accumulated depreciation and amortization | (43,926 | ) | (40,447 | ) | |||||
$ | 1,618 | $ | 12,591 | ||||||
Depreciation expense was $4,126 and $5,715 for the years ended December 31, 2014 and 2013 respectively. | |||||||||
During the year of 2014, we sold a portion of our fixed assets upon moving locations and had cash proceeds of $1,725, resulting in loss on disposal in amount of $5,122. | |||||||||
NOTE_5_NOTES_PAYABLE_RELATED_P
NOTE 5 - NOTES PAYABLE - RELATED PARTIES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
NOTE 5 - NOTES PAYABLE - RELATED PARTIES | |||||||||||||||||
NOTE 5 – NOTES PAYABLE – RELATED PARTIES | |||||||||||||||||
The Company’s notes payable to related parties classified as current liabilities consist of the following as of December 31, 2014 and 2013: | |||||||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||||||
Notes Payable | Principal | Interest* | Principal | Interest* | |||||||||||||
Related party | $ | 241,915 | 2.5 | % | $ | 274,078 | 2.5 | % | |||||||||
Related party | 15,000 | 1.5 | % | 20,000 | 1.5 | % | |||||||||||
Related party | 9,843 | N/A | |||||||||||||||
CEO – Related Party | 26,326 | - | 36,009 | ||||||||||||||
Total | $ | 293,084 | $ | 330,087 | |||||||||||||
On August 30, 2012 a company that is majority owned by a foreign investor and personal friend of the Company’s President and CFO, entered into an arrangement with the Company to loan up to $100,000 (subsequently increased to $300,000) based on purchase orders or invoices that have not been previously factored on a revolving basis at a rate of 2.5% per month (1.5% interest plus 1% penalty fee on the outstanding balance when interest is accrued). The initial deposit for this loan came from the Company’s President and CFO pursuant to the investor, who is a foreign national, setting up an appropriate entity to handle further transactions. Further, the Company’s President and CFO continues to personally guarantee the loan. On May 14, 2014, the investor agreed and the Board voted by Unanimous Consent, to convert the original note of $100,000 to stock and warrants based on the Company’s existing PPM based on converting the amount in to stock at the rate of $2.40 per share for 41,667 shares and receiving 6,250,000 5-year warrants based on 75% of the amount of shares to be issued at a strike price of $0.012. The investor agreed to this conversion on the condition that the shares would be issued without a restrictive legend and that the investor was able to deposit them in a brokerage account within 90 days. On August 1, 2014, the investor notified the Company that they were successful in depositing the shares into a brokerage account and the Company was credited a principal and interest payment of $100,000 allocated $47,445 and $57,555 respectively. | |||||||||||||||||
On December 21, 2014, the Company issued a note in total amount of $28,040, consisting of principal of $25,000 plus $3,040 additional advance. The note bears interest at a rate of 18% per annum and due on _________. | |||||||||||||||||
Between November 7 and November 20, 2014 , part of the outstanding principal of $58,059 and accrued interest of $21,986 were converted into 84,653 shares of the Company’s common stock, the fair value of which were $152,322, resulting in loss on debt conversion in amount of $72,277. (see Note 14) | |||||||||||||||||
At December 31, 2014 and 2013 there was outstanding principal balance of $241,915 and $274,078, based on the above mentioned activity respectively. Accrued interest and fees at December 31, 2014 and 2013 was $7,157, and $17,923 respectively. | |||||||||||||||||
On June 27, 2012 an individual whom the Company’s President and COO has significant influence over, loaned the Company $10,000 at an interest rate of 1.5% per month payable monthly. Between July 13, 2012 and July 24, 2012 the related party advanced an additional $15,000 (the 2012 advances) due on demand. On January 1, 2013, the Company received $19,400 from this related party in exchange for forty-five day original issue discount note with a face value of $20,000 and a maturity date of February 15, 2013 (the 2013 note). The original discount interest rate was 2% per month. On May 30, 2014 a principal payment was made to the related party in the amount of $5,000. At December 31, 2014 and 2013 there was an outstanding principal balance of $15,000 and $20,000, respectively. Accrued interest at December 31, 2014 and 2013 was $0 and $0. | |||||||||||||||||
On October 14, 2014, the Company issued a note of $10,000 with OID in amount of $750. At December 31, 2014, the balance of the note was $9,843, including accrued interest of $593. | |||||||||||||||||
During the second quarter of 2012, the Company reclassified $30,265 of accounts payable balances due to the CEO, to Notes payable – related parties. These balances were a result of Company expenses charged to the CEO’s personal credit cards. The Company was previously paying the credit card companies directly for these expenses incurred. During the third quarter 2012 the company recorded accrued payroll of $54,682 for this officer. These amounts are non-interest bearing and are on demand. The Company pays these loans as sufficient funds become available. At December 31, 2014 and 2013 this officer had an outstanding loan balance of $26,326 and $36,009, respectively. | |||||||||||||||||
NOTE_6_NOTE_PAYABLE_STOCKHOLDE
NOTE 6 - NOTE PAYABLE - STOCKHOLDER | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
NOTE 6 - NOTE PAYABLE - STOCKHOLDER | |||||||||||||||||
NOTE 6 – NOTE PAYABLE – STOCKHOLDER | |||||||||||||||||
The Company’s notes payable to stockholder classified as current liability at December 31, 2014 and 2013 consists of the following: | |||||||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||||||
Note Payable | Principal | Interest* | Principal | Interest* | |||||||||||||
Stockholder | $ | 50,000 | 2.5 | % | $ | 50,000 | 2.5 | % | |||||||||
*Interest per month | |||||||||||||||||
On January 11, 2012 a stockholder loaned the Company $35,000 based on purchase orders or invoices that have not been previously factored on a revolving basis at a rate of 3% per month (1.5% interest plus 1.5% penalty fee on the outstanding balance when the company does not remit funds received from the invoices but uses them as working capital) for one year. On April 13, 2012, the stockholder loaned additional principal to the Company in the aggregate amount $25,000. On June 28, 2012, the Company made a $10,000 principal payment on the note. On January 1, 2013, the Company entered into a new agreement with the stockholder to rollover an existing line of credit in the amount of $50,000. The new note maintains similar terms and conditions but with a reduction in the monthly penalty fee from 1.5% to 1%. At December 31, 2014 and 2013 the principal balance on the note was $50,000. At December 31, 2014 and 2013 the accrued interest on the note balance was $6,250 and $2,458, respectively. |
NOTE_7_NOTE_PAYABLE_CONVERTIBL
NOTE 7 - NOTE PAYABLE, CONVERTIBLE OID - RELATED PARTY | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||
NOTE 9 - NOTE PAYABLE, CONVERTIBLE OID - RELATED PARTY | |||||||||||||||||||||||||
NOTE 7 – NOTE PAYABLE, CONVERTIBLE OID – RELATED PARTY | |||||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||||||||||||||
Notes Payable – Convertible | Principal | Unamort | Principal, | Principal | Unamort | Principal, | |||||||||||||||||||
Discount | Net of | Discount | Net of | ||||||||||||||||||||||
Discount | Discount | ||||||||||||||||||||||||
Related Party Affiliate | $ | 66,000 | - | $ | 66,000 | $ | 66,000 | - | $ | 66,000 | |||||||||||||||
In June 2012, a related party who is an affiliate of the President and COO, made a non interest bearing short-term loan to the Company in the amount of $60,000. On August 15, 2012, this loan was exchanged for a one year original issue discount convertible note with detachable warrants. The face value of the note is $66,000. The $6,000 original issue discount was expensed as interest over the term of the note which matured in August 2013. The convertible note payable is convertible into 19,800 shares of the Company’s common stock at a conversion rate of $3.34 per share. The Company valued the beneficial conversion feature attached to the note using the intrinsic value method at a relative fair value of $28,571. The five-year warrants to purchase 3,959,921 shares of the Company’s common stock at an exercise price of $0.033 were valued at a relative fair value of $31,429 based on using the Black-Scholes pricing model assuming a dividend yield of 0%, an expected volatility of 462.61%, and a risk free interest rate of .102%. The beneficial conversion feature and the relative fair value of the warrants were recorded as an increase to additional paid in capital and a discount to the note to be amortized to interest expense over the term of the note. The Company is technically in default though no written notice has been received from the related party. The Company is in discussions with the related party regarding either converting the note or extending it for further periods. As of the date of this report discussions continue. The net carrying value of the note at December 31, 2014 and 2013 was $66,000. | |||||||||||||||||||||||||
NOTE_8_NOTES_PAYABLE_CONVERTIB
NOTE 8 - NOTES PAYABLE CONVERTIBLE - SHAREHOLDERS | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||
NOTE 8 - NOTES PAYABLE CONVERTIBLE - SHAREHOLDERS | |||||||||||||||||||||||||
NOTE 8 – NOTES PAYABLE, CONVERTIBLE – Shareholders | |||||||||||||||||||||||||
As of | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Notes Payable - Convertible | Principal | Conversion | Principal, | Principal | Conversion | Principal, | |||||||||||||||||||
to | Net of | to | Net of | ||||||||||||||||||||||
Common | Discount | Common | Discount | ||||||||||||||||||||||
Stock | Stock | ||||||||||||||||||||||||
Shareholder | $ | 68,750 | $ | (68,750 | ) | $ | — | $ | 68,750 | $ | (68,750 | ) | $ | — | |||||||||||
Shareholder | 13,750 | (13,750 | ) | — | 13,750 | (13,750 | ) | — | |||||||||||||||||
$ | 82,500 | $ | (82,500 | ) | $ | — | $ | 82,500 | $ | (82,500 | ) | $ | — | ||||||||||||
On July 18th, 2011 the Company received $125,000 from a shareholder in exchange for a one year original issue discount convertible note with detachable warrants. The face value of the note is $137,500. The $12,500 original issue discount is expensed as interest over the term of the note. The convertible note payable is convertible into 4,125,000 shares of the Company’s common stock at a conversion rate of $0.033 per share. The Company has valued the beneficial conversion feature attached to the note using the intrinsic value method at $62,500. The five-year warrants to purchase 3,750,000 shares of the Company’s common stock at an exercise price of $0.033 were valued at their relative fair value of $62,500 based on using the Black-Scholes pricing model assuming a dividend yield of 0%, an expected volatility of 347.62%, and a risk free interest rate of 1.46%. The beneficial conversion feature and the relative fair value of the warrants are recorded as an increase to additional paid in capital and a discount to the note. During the first quarter 2012, the shareholder made an additional investment of $62,500. On February 24, 2012, as a condition for this further investment, the conversion price of the note issued on July 18, 2011 was reduced to $.025 and an equivalent reduction in the exercise price of the warrants was executed. This modification qualifies for treatment as a debt extinguishment for financial accounting purposes and all remaining discounts were expensed. The exercise price exceeded the stock price on the date of modification; therefore no beneficial conversion value was recorded for the new note. On March 6, 2012 the shareholder converted this note in the amount of $137,500, at the contractual conversion rate of $.025, into 5,499,999 shares of Class A common stock. | |||||||||||||||||||||||||
On February 24, 2012, the Company received $62,500 from a shareholder in exchange for a one year original issue discount convertible note with detachable warrants. The face value of the note is $68,750. The $6,250 original issue discount is recorded as debt discount and expensed as interest over the term of the note. The Company has valued the beneficial conversion feature attached to the note using the intrinsic value method at $24,606. The five-year warrants to purchase 3,750,000 shares of the Company’s Class A common stock at an exercise price of $0.033 were valued at a relative fair value of $37,894 based on using the Black-Scholes pricing model assuming a dividend yield of 0%, an expected volatility of 462.61%, and a risk free interest rate of .89%. The beneficial conversion feature and the relative fair value of the warrants are recorded as an increase to additional paid in capital and a discount to the note. On February 24, 2013, this note became due and payable. On August 1st, 2013, a settlement agreement was reached to convert a convertible note in the amount of $68,750 plus default penalty and interest of $24,063 for a total of $92,813, which was expensed, into 5,568,768 shares of common stock. The conversion occurred at the contractual conversion rate of $0.01667 based on the anti-dilution provision triggered by the recent 3:1 forward split and a $0.05 conversion rate. The net value of the note at December 31, 2013 and December 31, 2012 was $0 and $58,579, respectively. | |||||||||||||||||||||||||
On May 11, 2012, the Company received an additional investment of $12,500 from a shareholder in exchange for a one year original issue discount convertible note with detachable warrants. The face value of the note is $13,750. The $1,250 original issue discount is expensed as interest over the term of the note. The Company has valued the beneficial conversion feature attached to the note using the intrinsic value method at $1,545. The five-year warrants to purchase 825,000 shares of the Company’s Class A common stock at an exercise price of $0.017 were valued at the relative fair value of $4,970 based on using the Black-Scholes pricing model assuming a dividend yield of 0%, an expected volatility of 462.61%, and a risk free interest rate of .096%. The beneficial conversion feature and the relative fair value of the warrants are recorded as an increase to additional paid in capital and a discount to the note. This note was converted in July of 2013 (See Note 14). The net value of the note at December 31, 2013 and December 31, 2012 was $0 and $10,963, respectively. | |||||||||||||||||||||||||
NOTE_9_NOTES_PAYABLE_CONVERTIB
NOTE 9 - NOTES PAYABLE, CONVERTIBLE OID - STOCKHOLDER | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||
NOTE 9 - NOTES PAYABLE, CONVERTIBLE OID - STOCKHOLDER | NOTE 9 – NOTES PAYABLE, CONVERTIBLE OID – STOCKHOLDER | ||||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||||
Notes Payable - OID | Unamort | Principal, | Principal | Unamort | Principal, | ||||||||||||||
Principal | Discount | Net of | Discount | Net of | |||||||||||||||
Discount | Discount | ||||||||||||||||||
Stockholder | $ | 165,000 | $ | (13,969 | ) | $ | 151,031 | $ | 150,068 | $ | (7,384 | ) | $142,684 | ||||||
On July 15th, 2011 the Company received $125,000 from a stockholder in exchange for a one year original issue discount convertible note with detachable warrants. The face value of the note was $137,500. The $12,500 original issue discount was recorded as debt discount and expensed as interest over the term of the note which matured in July 2012. The convertible note payable was convertible into 20,625 shares of the Company’s common stock at a conversion rate of $66 per share. The Company valued the beneficial conversion feature attached to the note using the intrinsic value method at $62,500. The five-year warrants to purchase 3,750,000 shares of the Company’s common stock at an exercise price of $0.33 were valued at the relative fair value of $62,500 based on using the Black-Scholes pricing model assuming a dividend yield of 0%, an expected volatility of 347.62%, and a risk free interest rate of 1.46%. The beneficial conversion feature and the relative fair value of the warrants were recorded as an increase to additional paid in capital and a discount to the note. On July 15, 2012, the maturity date, the $137,500 note was exchanged for a new two year original discount secured note with no conversion rights. The note is secured by the Company’s intellectual property, notably the patent for OSPI. In exchange for the security the investor agreed to waive the conversion rights and cancel the warrants issued with the original note. The face value of the note is $165,000. The $27,500 original issue discount is expensed as interest over the term of the note. On February 8, 2013, the Company entered into an Inter-creditor Agreement with Liquid Capital Exchange, Inc. (the Company’s factor) and the stockholder. The Inter-creditor Agreement resolves a definition dispute concerning UCC’s filed by both parties to protect their collateral. A part of this agreement calls for the stockholder to receive 5% of all factor advances to the Company until such time the stockholder loan is paid in full. Additionally, until the loan is paid, if there is a trigger notice (loan is due or is called), the factor will pay to the stockholder all factor holdback amounts after collection of the related accounts receivable, less any factor fees. On July 15th, 2014, the maturity date, the Company entered into a 1-year forbearance agreement extending the maturity of the note until July 14th, 2015. The agreement calls for the note’s face value to be increased to $165,000 with a $14,932 original issue discount expensed as interest over the term of the note. The forbearance agreement calls for a 25% penalty on the outstanding balance of the note if it is not paid by the maturity date. As consideration for the extension of time, the stockholder requested 1.5 million warrants which the board granted on September 8, 2014. The five-year warrants to purchase 1,500,000 shares of the Company’s common stock at an exercise price of $0.008 were valued at the relative fair value of $11,900 based on using the Black-Scholes pricing model assuming a dividend yield of 0%, an expected volatility of 236.31%, and a risk free interest rate of 1.65%. (See Note 15) | |||||||||||||||||||
The net carry value of the note at December 31, 2014 and 2013 is $151,031 and $142,684, respectively, net of unamortized original issue discount of $8,019 and $5,950 related to the warrant discount at December 31, 2014 and $7,384, at December 31, 2013. | |||||||||||||||||||
NOTE_10_NOTES_PAYABLE_THIRD_PA
NOTE 10 -NOTES PAYABLE - THIRD PARTY | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NOTES PAYABLE - THIRD PARTY | NOTE 10 – NOTES PAYABLE – THIRD PARTY |
On May 7, 2013, a third party loaned the Company $45,000 at 1.5% interest per month for six months. On November 8, 2013, this note was extended for a further 3 months with the same terms and conditions. On February 8, 2014 this note was extended for a further 3 months with the same terms and conditions. On May 8, 2014 this note was extended for a further 3 months with the same terms and conditions. On August 8, the note holder requested repayment of 50% of the note by November 30, 2014 and the note was further extended until that time at the same terms and conditions. As of December 31, 2014 and 2013 the balance on the note was $45,000 and $45,000 respectively. | |
On August 8, 2014, a deposit of $50,000 was received by ISA on behalf of its wholly owned subsidiary TrueVue 360 Inc., which had entered into a 1-year funding agreement with a Third Party beginning on September 1, 2014 for an advance of $50,000 against future receivables of $62,400. The agreement calls for thirteen payments of $4,800 every four weeks until the total due of $62,400 is paid to the party advancing the funds. The company is amortizing the original issue discount over the term of debt. The unamortized discount at December 31, 2014 was $8,584 and the principal due at December 31, 2014 was $43,200. |
NOTE_11_LINE_OF_CREDIT
NOTE 11 - LINE OF CREDIT | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
NOTE 11 - LINE OF CREDIT | |
NOTE 11 – LINE OF CREDIT | |
The Company has a line of credit with Wells Fargo Bank. The line of credit provides for borrowings up to $40,000. The balance as of December 31, 2014 and 2013 was $37,996 and $39,979, respectively. This line of credit has no maturity date. The annual interest rate is the Prime Rate plus 3%. The CEO of the Company is the personal guarantor. |
NOTE_12_COMMITMENTS_AND_CONTIN
NOTE 12 - COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NOTE 12 - COMMITMENTS AND CONTINGENCIES | |
NOTE 12 – COMMITMENTS AND CONTINGENCIES | |
Operating lease | |
On April 25, 2011, the Company entered into a 3 year escalating lease agreement for 1,352 square feet commencing in July. The monthly rental rate is $1,800, $1,920 and $2,040 for the lease years ending July 31, 2012, 2013 and 2014, respectively. The Company terminated this lease in July of 2014 owing three months’ rent for total of $6,091. On August 1st, 2014, the Company entered into a settlement agreement with the landlord whereby a note was executed for a total of $4,401 to be paid in 7 monthly installments of $600 with the first payment in September 1, 2014, foregoing the original rent deposit of $1,690 and an 8th final payment of $201 for a total settlement of $6,091. The balance at December 31, 2014 was $2,965 and included in accounts payables. | |
On May 9, 2014 a two year lease was signed by Management for a new office located at 2114 Rays Way, Stuart, Florida, 34994. A security deposit in the amount of $1,200 was paid at the time of signing. The monthly rental rate is $1,200 and $1,260 for the lease years ending July 31, 2015 and July 31, 2016, respectively. The lease was terminated due to the relocation of our office to Jacksonville, FL as a result of the completion of reverse triangular merger (see Note 18). Accordingly, deposit of $1,200 was forfeited for early termination. | |
Rent expense for the years ended December 31, 2014 and 2013 was $24,887 and $26,527, respectively. |
NOTE_13_RELATED_PARTIES
NOTE 13 - RELATED PARTIES | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
NOTE 13 - RELATED PARTIES | NOTE 13 – RELATED PARTIES |
As of December 31, 2014 and 2013 there were various notes and loans payable to related parties (see Notes 5 through 9). | |
NOTE_14_STOCKHOLDERS_DEFICIT
NOTE 14 - STOCKHOLDERS DEFICIT | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
NOTE 14 - STOCKHOLDERS DEFICIT | |
NOTE 14 – STOCKHOLDERS’ DEFICIT | |
Common stock issued for 3:1 forward split of Class A Common Stock | |
On August 1, 2013, the Company issued 214,578 shares of Common Stock to non-affiliate shareholders, pursuant to a recapitalization. (See Note 16) | |
Common stock issued for cash | |
On January 27, 2014, the Company entered into an agreement to issue 25,000 shares of common stock at $2.40 per share to one accredited investor in exchange for $60,000. The company received the funds in three equal payments of $20,000 with the final $20,000 received on April 22, 2014. The Company also issued warrants to purchase 3,750,000 shares of common stock at an exercise price of $0.012 per share with this offering. | |
On February 14, 2014, the Company issued 20,831 shares of common stock at $2.40 per share to one accredited investor in exchange for $50,000. The Company also issued warrants to purchase 3,124,688 shares of common stock at an exercise price of $0.012 per share with this offering. | |
On October 24, 2013, the Company issued 25,000 shares of common stock at $2.40 per share to one accredited investor in exchange for $60,000. The Company also issued 3,750,000 warrants with the investment (See Note 15). | |
On December 22, 2013, the Company entered into an agreement to issue 41,663 shares of common stock at $2.40 per share to one accredited investor in exchange for $100,000. The Company received the funds in early January 2014 and issued the 41,663 shares. The Company also issued 6,249,375 warrants with this offering (See Note 15). | |
Common stock issued for cashless warrant exercise | |
On February 10, 2014, the Company issued 22,255 shares of common stock in connection with the cashless exercise of warrants to purchase 3,750,000 and 4,125,000 shares of the Company’s common stock exercisable at $0.01 per share and based upon the market values of the Company’s common stock of $4.60 per share. | |
Common stock issued for services | |
On May 5, 2014, the Company signed a letter of authorization with Hayden IR authorizing the conversion of four past due Hayden IR invoices which totaled $12,000 to be converted into 5,000 shares of common stock at a conversion price of $2.40. Based on prior cash sales with warrants, the value of the shares was $1.36 and a gain was recorded of $5,200. The shares are to be split up amongst Hayden IR and its subsidiary Stratcon Partners. | |
On July 17, 2013, the Company granted a consulting firm 30,000 restricted shares of common stock for a one year agreement. The purpose of the agreement is to provide consultation to the Company with respect to various fund raising and other capital market activities related to international sources of funding. 10,000 shares were issued on August 23, 2013. As a result of the reclassification of the Company’s common stock and subsequent dividend, an additional 20,000 shares were issued on August 30, 2013. The shares were valued at $1.34 or $40,000 based on the quoted trading price on the grant date and the company recorded a prepaid expense to be amortized over the one-year term of the agreement. | |
On June 1, 2013, the Company granted a consulting firm 22,500 common shares for a one year investor relations agreement. The shares were issued September 26, 2013. The shares were valued at $0.87 or $19,500 based on the quoted trading price on the grant date and the company recorded a prepaid expense to be amortized over the one-year term of the agreement. | |
Conversion of notes payable related parties to common stock | |
On August 1, 2014, the Company converted principal and interest payment of $100,000 into 41,667 shares of common stock. No gain or loss on conversion was recorded as the shares were issued at fair market value. In conjunction with the note conversion, the company issued the lender five year warrants to purchase 6,250,000 shares of common stock at an exercise price of $0.012. The warrants were valued at a fair value of $77,997 based on using the Black-Scholes pricing model assuming a dividend yield of 0%, an expected volatility of 280%, and a risk free interest rate of 1.65%. The $77,997 is included in interest expense in the accompanying unaudited consolidated financial statements. | |
On May 10, 2013 the Board of Directors adopted the resolution to issue a shareholder 1,250 shares as a condition of an additional investment. The Company originally issued the shareholder 3,750 shares, at $6.60 per share, for a $25,000 investment on July 14, 2011. This July 14, 2011, investment was repriced at $5 per share resulting in the additional 1,250 shares. These shares were issued on May 23, 2013. The Company recorded an additional expense of $1,833 related to the share issuance based on the quoted share price on the grant date of $1.40. | |
On May 11, 2013, the shareholder verbally requested to convert a $13,750 note into 4,125 shares common stock at the contractual conversion rate. The shares were issued during the third quarter when the Company received the appropriate conversion notice (See Note 8). | |
On August 1, 2013, a settlement agreement was reached to convert a convertible note in the amount of $68,750 plus default penalty and interest of $24,063, which was expensed, into 27,844 shares of common stock. The conversion occurred at the contractual conversion rate of $3.33 (See Note 8). | |
On ____________, the principal of $58,059 and accrued interest of $21,986 were converted into 84,653 shares of the Company’s common stock, the fair value of which were $152,322, resulting in loss on debt conversion in amount of $72,277. |
NOTE_15_COMMON_STOCK_PURCHASE_
NOTE 15 - COMMON STOCK PURCHASE WARRANTS AND OPTIONS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
NOTE 15 - COMMON STOCK PURCHASE WARRANTS AND OPTIONS | NOTE 15 – COMMON STOCK PURCHASE WARRANTS AND OPTIONS | ||||||||||||||||
Warrants | |||||||||||||||||
Following is a summary of activity for warrants for common stock for the years ended December 31, 2014 and 2013: | |||||||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||||||
Shares | Weighted Avg | Shares | Weighted Avg | ||||||||||||||
Exercise Price | Exercise Price | ||||||||||||||||
Outstanding at beginning of year | 29,859,375 | $ | 0.031 | 19,860,000 | $ | 0.031 | |||||||||||
Granted | 17,249,688 | $ | 0.012 | 9,999,375 | $ | 0.012 | |||||||||||
Exercised | (7,875,000 | ) | $ | 0.012 | — | — | |||||||||||
Forfeited | — | — | — | — | |||||||||||||
Expired | — | — | — | — | |||||||||||||
Outstanding at end of year | 39,234,063 | $ | 0.02 | 29,859,375 | $ | 0.031 | |||||||||||
Exercisable at end of year | 39,234,063 | $ | 0.02 | 29,859,375 | $ | 0.031 | |||||||||||
Weighted average grant date fair value | $ | 0.016 | $ | 0.016 | |||||||||||||
Weighted average remaining contractual term | 3.02 | 3.02 | |||||||||||||||
See Notes 9 and 13 for discussion of warrant activity for the years ended December 31, 2014 and 2013. | |||||||||||||||||
On January 22, 2014, the Board of Directors approved the modification of warrants to purchase 3,750,000 and 4,125,000 shares of the Company’s common stock by reducing the exercise price of each prior grant from $0.025 and $0.033 respectively, to $0.01 per share. The Company revalued the warrants just prior to and after the modification and there was no material incremental increase in value. These warrants were then exercised under the cashless exercise provisions (See Note 14). | |||||||||||||||||
On October 24, 2013, warrants to purchase 3,750,000 shares of Class A common stock at $0.012 per share were issued to an accredited investor in conjunction with a private offering (See Note 14). | |||||||||||||||||
On December 22, 2013, warrants to purchase 6,249,375 shares of Class A common stock at $0.012 per share were issued to an accredited investor in conjunction with a private offering. (See Note 14). | |||||||||||||||||
Options | |||||||||||||||||
Following is a summary of stock option activity for the years ended December 31, 2014 and 2013. | |||||||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||||||
Shares | Weighted Avg | Shares | Weighted Avg | ||||||||||||||
Exercise Price | Exercise Price | ||||||||||||||||
Outstanding at beginning of year | 1,000,000 | $ | 0.03 | 350,000 | $ | 0.035 | |||||||||||
Granted | 3,150,000 | $ | 0.02 | 650,000 | $ | 0.02 | |||||||||||
Exercised | — | — | — | — | |||||||||||||
Forfeited | — | — | — | — | |||||||||||||
Expired | — | — | — | — | |||||||||||||
Outstanding at end of year | 4,150,000 | $ | 0.02 | 1,000,000 | $ | 0.03 | |||||||||||
Exercisable at end of year | 4,150,000 | $ | 0.02 | 100,000 | $ | 0.035 | |||||||||||
Weighted average grant date fair value | $ | 0.03 | $ | 0.03 | |||||||||||||
Weighted average remaining contractual term | 4.11 | 4.11 | |||||||||||||||
The total unrecognized option expense was $0 and $6,667 at December 31, 2014 and 2013, respectively. | |||||||||||||||||
On January 1, 2014, the Company issued stock options to purchase 1,000,000 shares of common stock with an exercise price of $0.02 and valued at $0.02 per option for a total of $20,000 to its CEO. The options vested on June 30, 2014. The options were valued using the Black-Scholes model with a dividend rate of 0%, volatility of 294%, risk free interest rate of 0.76% and a term of 5 years. The expense in 2014 was $20,000. | |||||||||||||||||
On January 1, 2014, the Company issued stock options to purchase 1,000,000 shares of common stock with an exercise price of $0.02 and valued at $0.02 per option for a total of $20,000 to its President and CFO. The options vested on June 30, 2014. The options were valued using the Black-Scholes model with a dividend rate of 0%, volatility of 294%, risk free interest rate of 0.76% and a term of 5 years. The expense in 2014 was $20,000. | |||||||||||||||||
On January 22, 2014, the Company approved the issuance of 1,000,000 options to an independent financial consultant to act as an advisor to the Company with respect to international capital markets strategy. The consultant received no other cash or stock compensation and continues to work closely with the Company on matters directly pertaining to capitalization. The options have an exercise price of $0.018 per share, a five-year term, vesting immediately. The options were valued using the Black-Scholes model using a volatility of 294%, an expected term of 5 years and an interest rate of 0.76%. The options were valued at $18,000 and were immediately expensed. | |||||||||||||||||
On March 26, 2014, the Company issued stock options to purchase 150,000 shares of common stock with an exercise price of $0.012 valued at $0.013 per option for a total of $1,800 to its independent director. The options vested on June 30, 2014. The options were valued using the Black-Scholes model with a dividend rate of 0%, volatility of 294%, risk free interest rate of 0.76% and a term of 5 years. The expense in 2014 was $1,800. | |||||||||||||||||
On January 1, 2013 the Company granted options to purchase 650,000 shares of common stock to its independent directors. The options have an exercise price of $0.02 per share, a five-year term, vest on January 1, 2014¸ and are subject to continuing service as a director. The options were valued using the Black-Scholes model using a volatility of 508.21%, an expected term of 5 years and an interest rate of 0.76%. The options are valued at $14,500 and are being recognized as expense over the requisite service period. |
NOTE_16_RECAPITALIZATION
NOTE 16 - RECAPITALIZATION | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Notes to Financial Statements | ||||||||||||||
NOTE 16 - RECAPITALIZATION | ||||||||||||||
NOTE 16 - RECAPITALIZATION | ||||||||||||||
The Company has affected a recapitalization by splitting the common stock into two classes – Class A common stock to be held by all shareholders except for those parties who may be deemed to be affiliates, namely all officers, directors and holders of more than 10% of the outstanding shares and Class B shareholders who are the presumed affiliates. The only difference between Class A and Class B is that Class A shareholders will no longer have voting rights while Class B shareholders retain voting rights. Each share of Class B Stock shall be convertible into one share of Class A Stock at the option of the holder beginning 90 days after the date this Second Amendment has been filed with the Florida Secretary of State. | ||||||||||||||
On August 1st, 2013 the Company filed the Second Articles of Amendment (the “Second Amendment”) creating the two classes, and also declared a two-for-one stock dividend to holders of Class A common stock of record on August 1, 2013 (the “Record Date”). Shareholders that held one share of common stock on the Record Date, now own three shares. No dividend was declared for holders of what is now Class B common stock. The stock dividend was approved by the Board of Directors as a way of thanking the Company’s shareholders for their patience and rewarding them for giving management additional time to establish a path to profitability. | ||||||||||||||
All future dividends and distributions will be shared without regard to the creation of classes. The recapitalization occurred by the written consent of holders of more than the majority of our outstanding shares, based upon the recommendation of the Board of Directors. Following obtaining that consent, on August 1, 2013, the Company filed the Second Amendment with the Florida Secretary of State, creating the two classes and also increasing the number of authorized shares to 450,000,000 shares of Class A common stock, 50,000,000 of Class B common stock and reducing the number of shares of preferred stock to 1,000,000 shares. The Company increased the number of authorized shares of capital stock in order to accommodate the dividend described in the above paragraph and also permit the Company to have the ability to raise additional funds in order to support our future growth and fund our operations. | ||||||||||||||
This change in capital structure was recorded retroactive in the accompanying Financial Statements for all periods presented. The following table summarizes the recapitalization: | ||||||||||||||
Recapitalization | ||||||||||||||
1-Aug-13 | ||||||||||||||
Before | After | |||||||||||||
Par | Authorized | Par | Authorized | |||||||||||
Value | Shares | Value | Shares | |||||||||||
Authorized Shares | ||||||||||||||
Preferred stock | 0.001 | 2,000,000 | 0.001 | 1,000,000 | ||||||||||
Common Stock | 0.001 | 50,000,000 | 0.001 | — | ||||||||||
Common Stock - Class A | 0.001 | — | 0.001 | 450,000,000 | ||||||||||
Common Stock - Class B | 0.001 | — | 0.001 | 50,000,000 | ||||||||||
Total Authorized Shares | 52,000,000 | 501,000,000 | ||||||||||||
Issued and Outstanding | ||||||||||||||
Preferred stock | 0.001 | — | 0.001 | — | ||||||||||
Common Stock | 0.001 | 164,789 | 0.001 | — | ||||||||||
Common Stock - Class A | 0.001 | — | 0.001 | 321,867 | ||||||||||
Common Stock - Class B | 0.001 | — | 0.001 | 57,500 | ||||||||||
Total Authorized Shares | 164,789 | 379,367 | ||||||||||||
NOTE_17_INCOME_TAXES
NOTE 17 - INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
NOTE 17 - INCOME TAXES | NOTE 17 – INCOME TAXES | ||||||||
The Company files income tax returns in the U.S. federal jurisdiction and various states. There was no income tax expense in 2014 and 2013 due to the Company's net taxable losses. The Company had net operating loss carry forwards of approximately $4,513,000 as of December 31, 2014 available to offset taxable income through 2034. The valuation allowance increased by $854,986 in 2014. The Company has established a 100% valuation allowance. | |||||||||
The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2008. None of the tax years subject to examination are currently under examination by a tax authority and the Company has not received notice of the intent by any tax authority to commence an examination. | |||||||||
The Company adopted the provisions of FIN No. 48 on January 1, 2009. As a result of the implementation of FIN No. 48, the Company did not recognize any liability for unrecognized tax benefits, since the Company has concluded that all of its tax positions are highly certain of being upheld upon examination by federal or state tax authorities. | |||||||||
The significant components of the Company’s deferred tax account balances are as follows: | |||||||||
Year ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Deferred tax assets: | |||||||||
Net operating losses | $ | 1,927,502 | $ | 1,698,286 | |||||
Allowance for bad debts | - | 2,066 | |||||||
Stock options | - | 6,167 | |||||||
Capital loss carryover | — | — | |||||||
Common Stock for Services | — | — | |||||||
Deferred revenue | — | — | |||||||
Valuation allowance | (1,927,502 | ) | (1,691,298 | ) | |||||
Net deferred tax assets | $ | - | $ | 15,221 | |||||
Total deferred tax liabilities | - | (15,221 | ) | ||||||
Total net deferred taxes | $ | — | $ | — | |||||
Reconciliation of the differences between income tax benefit computed at the federal statutory tax rate of 34% for 2014 and 2013, respectively and the provision for income tax benefit for the years ended December 31, 2014 and 2013 is as follows: | |||||||||
Year ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Income tax (loss) at federal statutory rate | (34.00 | )% | (34.00 | )% | |||||
State taxes, net of federal benefit | (3.63 | )% | (3.63 | )% | |||||
Nondeductible items | (5.5 | )% | (93.37 | % | |||||
Changes in valuation allowance | 32.1 | % | 131 | % | |||||
0 | % | 0 | % |
NOTE_18_SUBSEQUENT_EVENTS
NOTE 18 - SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
NOTE 18 - SUBSEQUENT EVENTS | NOTE 18 – SUBSEQUENT EVENTS |
On February 20, 2015, the Company issued 25,000 shares of common stock to a consultant for accounting and filing related services. | |
On March 31, 2015, the Company filed an Amendment to Articles of Incorporation with the Secretary of State of Florida regarding the following: | |
1) Combine Class A Common Stock and Class B Common Stock into Common Stock; | |
2) Increase the authorized shares of Common Stock to 500,000,000 shares, par value $0.001; and | |
3) Increase the authorized shares of Preferred Stock to 10,000,000 shares, par value $0.001 | |
Also, on March 31, 2015, the Board of Directors approved the following actions: | |
1. Authorization to issue up to 501,811 shares of common stock upon the conversion of outstanding notes which the Company specifically is authorized to make convertible with two note holders who are also shareholders and have agreed to convert their notes in conjunction with the merger of Duos and ISA | |
2. Authorization to issue up to a 390,626 shares of common stock in connection with the conversion of a further $250,000 in notes payable for which the Company expressly has made convertible. | |
3. Authorization to issue up to 312,500 shares of common stock in connection with the payment of up to $107,500 for accounts payable and future services to be rendered in the next 12 months relating to investor relations, capital markets consulting and Securities and Exchange Commission’s filings, including Edgarizing costs. | |
4. Authorization to issue up to 127,366 shares of common stock in exchange for outstanding warrants and 14,750 shares in exchange for outstanding stock options which will comply with the covenant in the Merger Agreement with Duos that no warrants or option shall be in effect as of the closing of the merger. | |
5. Authorization that the Company shall issue up to 175,044 shares of common stock in full payment of accrued executive salaries, it being understood that the total amount owed had not yet been finalized and to issue up to 170,000 shares of common stock to its executive officers and directors. | |
On April 1, 2015, the Company completed the reverse triangular merger, pursuant to the previously disclosed Agreement and Plan of Merger (the “Merger Agreement”) among Duos Technologies, Inc., a Florida corporation (“Duos”), the Company and Duos Acquisition Corporation, a Florida corporation and wholly owned subsidiary of the Company (“Merger Sub”). Under the terms of the Merger Agreement, Merger Sub merged with and into Duos, with Duos remaining as the surviving corporation and a wholly-owned subsidiary of the Company (the “Merger”). The Merger was effective as of April 1, 2015, upon the filing of a copy of the Merger Agreement and articles of merger with the Secretary of State of the State of Florida (the “Effective Time”) , whereby Duos became a wholly owned subsidiary of the Company. As part of the merger agreement and based upon a final ISA share count outstanding and issuable of 2,500,000 shares based on the 1 for 200 reverse split, ISA confirmed to Duos executives that it would receive 60,000,000 shares to distribute among its shareholders. The Company intends to carry on Duos’ business as its principal line of business following the Merger. The Company also intends to continue its existing operations through its existing wholly owned subsidiary, TrueVue 360, Inc. | |
On April 9, 2015 the Company‘senacted1 for 200 reverse stock split was made effective by FINRA. All share numbers in these consolidated statements are retroactively restated herein except where noted. |
NOTE_1_NATURE_OF_OPERATIONS_AN1
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||
NATURE OF OPERATIONS | Nature of Operations | ||||||||||||||||||||||
Information Systems Associates, Inc. (“ISA”) or (“The Company”) was incorporated in Florida on May 31, 1994 to engage in the business of developing software for the financial and asset management industries under the laws of the State of Florida. The Company currently derives the majority of its revenue from Mobile Data Center Management™ systems and turnkey data center management solutions to customers primarily located within the United States specializing in various industries. Our products and services include data center asset/inventory management, data center management software and data center data collection. | |||||||||||||||||||||||
We are currently engaged and plan to continue in the sale of asset management software for corporate information technology data centers and networks. ISA is a "solution provider" positioned to develop and deliver comprehensive asset management systems large data center assets. As part of a long term reorganization of the entity, the Company announced the formation of a new wholly owned subsidiary, TrueVue 360, Inc. TrueVue 360’s mission is to develop and market a new Software as a Service (SaaS) offering for IT asset management. TrueVue 360 will operate independently of the parent company, ISA, which will now focus exclusively on providing independent consulting and professional services through its partners to large data centers worldwide. ISA continues to receive excellent ratings for quality and efficiency. | |||||||||||||||||||||||
In addition, the Company continues to evaluate other related technology offerings and has entered into discussions with a new venture whose mission is to develop and market a new platform for “collaborative consumption”, a rapidly growing industry aimed at connecting individuals to services and products (see Note 18). | |||||||||||||||||||||||
PRINCIPLES OF CONSOLIDATION | Principles of Consolidation | ||||||||||||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, TrueVue 360 Inc. All significant inter-company transactions and balances are eliminated in consolidation. | |||||||||||||||||||||||
USE OF ESTIMATES | Use of Estimates | ||||||||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. Most significant estimates in the accompanying financial statements include the allowance on accounts receivable, valuation of deferred tax assets, valuation of warrants issued with debt, valuation of beneficial conversion features in convertible debt and valuation of stock-based awards. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. | |||||||||||||||||||||||
CASH AND CASH EQUIVALENTS | |||||||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||||||
For the purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be a cash equivalent. | |||||||||||||||||||||||
CONCENTRATIONS | |||||||||||||||||||||||
Concentrations | |||||||||||||||||||||||
Cash Concentrations: | |||||||||||||||||||||||
Cash and cash equivalents are maintained at financial institutions and at times, balances may exceed federally insured limits. We have not experienced any losses related to these balances. There were no amounts on deposit in excess of federally insured limits at December 31, 2014 and 2013. | |||||||||||||||||||||||
Significant Customers and Concentration of Credit Risk: | |||||||||||||||||||||||
A significant portion of revenues is derived from certain customer relationships. The following is a summary of customers that each represents greater than 10% of total revenues in 2014 and 2013, and total accounts receivable at December 31, 2014 and 2013, respectively. | |||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||
Revenue | Accounts Receivable | Revenue | Accounts Receivable | ||||||||||||||||||||
Customer A | 66 | % | Customer A | 100 | % | Customer A | 49 | % | Customer A | 68 | % | ||||||||||||
Customer B | 17 | % | Customer B | 0 | % | Customer B | 18 | % | Customer B | 22 | % | ||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |||||||||||||||||||||||
Fair Value of Financial Instruments and Fair Value Measurements | |||||||||||||||||||||||
We measure our financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short maturities. Amounts recorded for notes payable, net of discount, and loans payable also approximate fair value because current interest rates available to us for debt with similar terms and maturities are substantially the same. | |||||||||||||||||||||||
We follow accounting guidance for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). | |||||||||||||||||||||||
The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: | |||||||||||||||||||||||
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. | |||||||||||||||||||||||
Level 2: Inputs, other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. | |||||||||||||||||||||||
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. | |||||||||||||||||||||||
ACCOUNTS RECEIVABLE AND FACTORING | |||||||||||||||||||||||
NOTE 3 – ACCOUNTS RECEIVABLE AND FACTORING | |||||||||||||||||||||||
In December 2011 the Company entered into an agreement with a Factoring company whereby the Company will assign, in the Factor’s sole discretion, selected accounts receivable to the Factor in exchange for initial cash funding ("factor advances") for up to 80% of the factored receivable. The minimum 20% reserve held back by the Factor is released after collection of the account receivable by the Factor. The company pays a 3% factor fee for each factored receivable. Since the factoring agreement provides for full recourse against the Company for factored accounts receivable that are not collected by the Factor for any reason, and the collection of such accounts receivable are fully secured by substantially all assets of the Company, the factoring advances have been treated as secured loans on the accompanying balance sheets. The total accounts receivable factored in 2014 and 2013 was $479,248 and $479,248 respectively. The factor fees incurred in 2014 and 2013 were $14,032 and $25,667, respectively. The Company eliminated the use of Factoring in 2014 due to the high cost of this facility. Total outstanding accounts receivable factored at December 31, 2014 and 2013 which is included in Accounts Receivable on the accompanying balance sheets was $0 and $0, respectively. | |||||||||||||||||||||||
The Company has total Accounts Receivable as of December 31, 2014 and 2013 as follows: | |||||||||||||||||||||||
As of December 31, | |||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||
Accounts Receivable | $ | 39,289 | $ | 32,186 | |||||||||||||||||||
Factored Accounts Receivable | — | — | |||||||||||||||||||||
Allowance for Doubtful Accounts | — | (5,490 | ) | ||||||||||||||||||||
Accounts Receivable, net | $ | 39,289 | $ | 26,696 | |||||||||||||||||||
PROPERTY AND EQUIPMENT | |||||||||||||||||||||||
NOTE 4 – PROPERTY AND EQUIPMENT | |||||||||||||||||||||||
The Company has total Property and Equipment as follows: | |||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||||||||||||
Computer software (purchased) | $ | 590 | $ | 590 | |||||||||||||||||||
Website development costs | 10,072 | 10,072 | |||||||||||||||||||||
Furniture, fixtures, and equipment | 33,218 | 40,712 | |||||||||||||||||||||
Leasehold improvements | 1,664 | 1,664 | |||||||||||||||||||||
45,544 | 53,038 | ||||||||||||||||||||||
Less accumulated depreciation and amortization | (43,926 | ) | (40,447 | ) | |||||||||||||||||||
$ | 1,618 | $ | 12,591 | ||||||||||||||||||||
Depreciation expense was $4,126 and $5,715 for the years ended December 31, 2014 and 2013 respectively. | |||||||||||||||||||||||
During the year of 2014, we sold a portion of our fixed assets upon moving locations and had cash proceeds of $1,725, resulting in loss on disposal in amount of $5,122. | |||||||||||||||||||||||
SOFTWARE DEVELOPMENT COSTS | |||||||||||||||||||||||
Software Development Costs | |||||||||||||||||||||||
Internal Use Software: | |||||||||||||||||||||||
The Company accounts for costs incurred to develop or purchase computer software for internal use in accordance with FASB ASC 350-40 “Internal-Use Software” or ASC 350-50 "Website Costs". As required by ASC 350-40, the Company capitalizes the costs incurred during the application development stage, which include costs to design the software configuration and interfaces, coding, installation, and testing. | |||||||||||||||||||||||
Costs incurred during the preliminary project stage along with post-implementation stages of internal use computer software are expensed as incurred. Capitalized development costs are amortized over a period of one to three years. Costs incurred to maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs requires considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility, and estimated economic life. | |||||||||||||||||||||||
Software to be sold or leased: | |||||||||||||||||||||||
Costs incurred in connection with the development of software products are accounted for in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") 985-20 Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market and capitalization ceases after the general release of the software. Amortization of capitalized software development costs begins upon initial product shipment. Capitalized software development costs are amortized over the estimated life of the related product using the straight-line method. The Company evaluates its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such software assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software asset. | |||||||||||||||||||||||
Software maintenance costs are charged to expense as incurred. The cost of the software and the related accumulated amortization are removed from the accounts upon retirement of the software with any resulting loss being recorded in operations. | |||||||||||||||||||||||
LONG-LIVED ASSETS | |||||||||||||||||||||||
Long-Lived Assets | |||||||||||||||||||||||
The Company evaluates the recoverability of its property, equipment, and other long-lived assets in accordance with FASB ASC 360 “Property, Plant and Equipment”, which requires recognition of impairment of long-lived assets in the event the net book value of such assets exceed the estimated future undiscounted cash flows attributable to such assets or the business to which such intangible assets relate. | |||||||||||||||||||||||
REVENUE RECOGNITION | |||||||||||||||||||||||
Revenue Recognition | |||||||||||||||||||||||
The Company recognizes revenue in accordance with Security Exchange Commission (SEC) Staff Accounting Bulletin No. 104, "Revenue Recognition" and Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 985-605-25 which addresses Revenue Recognition for the software industry. The general criteria for revenue recognition under ASC 985-605 for our Company which sells software licenses which do not require any significant modification or customization is that revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. | |||||||||||||||||||||||
The Company generates revenue from three sources: (1) Professional Services (consulting & auditing); (2) Software Licensing with optional hardware sales; and (3) Customer Service (training & maintenance/support). | |||||||||||||||||||||||
For sales arrangements that do not involve multiple elements: | |||||||||||||||||||||||
(1) Revenues for professional services, which are of short term duration, are recognized when services are completed, | |||||||||||||||||||||||
(2) Through December 31, 2014 software license sales have been one time sales of a perpetual license to use our software product and the customer also has the option to purchase third party manufactured handheld devices from us if they purchase our software license. Accordingly the revenue is recognized upon delivery of the software and delivery of the hardware, as applicable, to the customer, | |||||||||||||||||||||||
(3) Training sales are one time upfront short term training sessions and are recognized after the service has been performed, | |||||||||||||||||||||||
(4) Maintenance/support is an optional product sold to our software license customers under one year contracts. Accordingly, maintenance payments received upfront are deferred and recognized over the contract term. | |||||||||||||||||||||||
Arrangements with customers may involve multiple elements of the above sources. Training and maintenance on software products will generally occur after the software product sale while other services may occur before or after the software product sale and may not relate to the software product. | |||||||||||||||||||||||
Each element is accounted for separately when each element has value to the customer on a stand-alone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price for the items when sold separately. Once the selling price is allocated, the revenue for each element is recognized using the general and specific criteria under GAAP as discussed above for elements sold in non-multiple element arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company sells it various services and software and hardware products at established prices on a standalone basis which provides Company specific objective evidence of selling price for purposes of multiple element relative selling price allocation. All elements in multiple element arrangements with Company customers qualify as separate units of account for revenue recognition purposes. | |||||||||||||||||||||||
SALES RETURN RESERVE POLICY | |||||||||||||||||||||||
Sales Return Reserve Policy | |||||||||||||||||||||||
Our return policy generally allows our end users to return purchased hardware products for refund or in exchange for new products. We estimate a reserve for sales returns, if any, and record that reserve amount as a reduction of sales and as a sales return reserve liability. | |||||||||||||||||||||||
WARRANTY RESERVE POLICY | |||||||||||||||||||||||
Warranty Reserve Policy | |||||||||||||||||||||||
The Company is a distributor of products and warranties are the responsibility of the manufacturer. Therefore the Company does not record a record a reserve for product warranty. | |||||||||||||||||||||||
COST OF REVENUE | Cost of Revenue | ||||||||||||||||||||||
Cost of revenue includes hardware costs, amortization of capitalized software and labor costs for services. | |||||||||||||||||||||||
SHARE-BASED COMPENSATION | |||||||||||||||||||||||
Share-Based Compensation | |||||||||||||||||||||||
We follow the fair value recognition provisions of ASC 718, “Compensation – Stock Compensation”. The fair values of share-based payments are estimated on the date of grant using the Black-Scholes option pricing model, based on weighted average assumptions. Expected volatility is based on historical volatility of our common stock. We have elected to use the simplified method described in the Securities and Exchange Commission Staff Accounting Bulletin Topic 14C to estimate the expected term of employee stock options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. Compensation expense is recognized on a straight-line basis over the requisite service period of the award. | |||||||||||||||||||||||
The assumptions used in calculating the fair value of stock-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future. | |||||||||||||||||||||||
INCOME TAXES | NOTE 17 – INCOME TAXES | ||||||||||||||||||||||
The Company files income tax returns in the U.S. federal jurisdiction and various states. There was no income tax expense in 2014 and 2013 due to the Company's net taxable losses. The Company had net operating loss carry forwards of approximately $4,513,000 as of December 31, 2014 available to offset taxable income through 2034. The valuation allowance increased by $854,986 in 2014. The Company has established a 100% valuation allowance. | |||||||||||||||||||||||
The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2008. None of the tax years subject to examination are currently under examination by a tax authority and the Company has not received notice of the intent by any tax authority to commence an examination. | |||||||||||||||||||||||
The Company adopted the provisions of FIN No. 48 on January 1, 2009. As a result of the implementation of FIN No. 48, the Company did not recognize any liability for unrecognized tax benefits, since the Company has concluded that all of its tax positions are highly certain of being upheld upon examination by federal or state tax authorities. | |||||||||||||||||||||||
The significant components of the Company’s deferred tax account balances are as follows: | |||||||||||||||||||||||
Year ended | |||||||||||||||||||||||
December 31, | |||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||
Deferred tax assets: | |||||||||||||||||||||||
Net operating losses | $ | 1,927,502 | $ | 1,698,286 | |||||||||||||||||||
Allowance for bad debts | - | 2,066 | |||||||||||||||||||||
Stock options | - | 6,167 | |||||||||||||||||||||
Capital loss carryover | — | — | |||||||||||||||||||||
Common Stock for Services | — | — | |||||||||||||||||||||
Deferred revenue | — | — | |||||||||||||||||||||
Valuation allowance | (1,927,502 | ) | (1,691,298 | ) | |||||||||||||||||||
Net deferred tax assets | $ | - | $ | 15,221 | |||||||||||||||||||
Total deferred tax liabilities | - | (15,221 | ) | ||||||||||||||||||||
Total net deferred taxes | $ | — | $ | — | |||||||||||||||||||
Reconciliation of the differences between income tax benefit computed at the federal statutory tax rate of 34% for 2014 and 2013, respectively and the provision for income tax benefit for the years ended December 31, 2014 and 2013 is as follows: | |||||||||||||||||||||||
Year ended | |||||||||||||||||||||||
December 31, | |||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||
Income tax (loss) at federal statutory rate | (34.00 | )% | (34.00 | )% | |||||||||||||||||||
State taxes, net of federal benefit | (3.63 | )% | (3.63 | )% | |||||||||||||||||||
Nondeductible items | (5.5 | )% | (93.37 | % | |||||||||||||||||||
Changes in valuation allowance | 32.1 | % | 131 | % | |||||||||||||||||||
0 | % | 0 | % | ||||||||||||||||||||
EARNINGS (LOSS) PER SHARE | |||||||||||||||||||||||
Earnings (Loss) Per Share | |||||||||||||||||||||||
Basic earnings per share (EPS) are computed by dividing net (loss) by the weighted average number of common shares outstanding. The dilutive EPS adds the dilutive effect of stock options, warrants and other stock equivalents. As of December 31, 2014 and 2013, outstanding warrants to purchase an aggregate of 39,234,063 and 29,859,375 shares of common stock respectively and outstanding options to purchase 4,150,000 and 1,000,000 shares of common stock respectively were excluded from the computation of dilutive earnings per share because the inclusion would have been anti-dilutive. These warrants and options may dilute future earnings per share. The Company also has convertible debt convertible into 19,800 shares of common stock that may dilute future earnings. | |||||||||||||||||||||||
RECENT ISSUED ACCOUNTING STANDARDS | |||||||||||||||||||||||
Recent Issued Accounting Standards | |||||||||||||||||||||||
Financial Accounting Standards Board, Accounting Standard Updates which are not effective until after December 31, 2014 are not expected to have a significant effect on the Company’s consolidated financial position or results of operations. | |||||||||||||||||||||||
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205-40)”, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the implementation of this standard to have a material effect on its disclosures. |
NOTE_1_NATURE_OF_OPERATIONS_AN2
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Notes to Financial Statements | |||||||||||
Customer and Concentration of Credit Risk | |||||||||||
2014 | 2013 | ||||||||||
Revenue | Accounts Receivable | Revenue | Accounts Receivable | ||||||||
Customer A | 66% | Customer A | 100% | Customer A | 49% | Customer A | 68% | ||||
Customer B | 17% | Customer B | 0% | Customer B | 18% | Customer B | 22% | ||||
NOTE_3_ACCOUNTS_RECEIVABLE_AND1
NOTE 3 - ACCOUNTS RECEIVABLE AND FACTORING (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Accounts Receivable | |||||||||
As of | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Accounts Receivable | $ | 39,289 | $ | 32,186 | |||||
Factored Accounts Receivable | — | — | |||||||
Allowance for Doubtful Accounts | — | (5,490 | ) | ||||||
Accounts Receivable, net | $ | 39,289 | $ | 26,696 | |||||
NOTE_4_PROPERTY_AND_EQUIPMENT_
NOTE 4 - PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
PROPERTY AND EQUIPMENT | 31-Dec-14 | 31-Dec-13 | |||||||
Computer software (purchased) | $ | 590 | $ | 590 | |||||
Website development costs | 10,072 | 10,072 | |||||||
Furniture, fixtures, and equipment | 33,218 | 40,712 | |||||||
Leasehold improvements | 1,664 | 1,664 | |||||||
Total property and equipment | 45,544 | 53,038 | |||||||
Less accumulated depreciation and amortization | (43,926 | ) | (40,447 | ) | |||||
Net property and equipment | $ | 1,618 | $ | 12,591 | |||||
NOTE_5_NOTES_PAYABLE_RELATED_P1
NOTE 5 - NOTES PAYABLE - RELATED PARTIES (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
NOTES PAYABLE b RELATED PARTIES | 31-Dec-14 | 31-Dec-13 | |||||||||||||||
Notes Payable | Principal | Interest* | Principal | Interest* | |||||||||||||
Related party | $ | 241,915 | 2.5 | % | $ | 274,078 | 2.5 | % | |||||||||
Related party | 15,000 | 1.5 | % | 20,000 | 1.5 | % | |||||||||||
Related party | 9,843 | N/A | 0 | ||||||||||||||
CEO – Related Party | 26,326 | - | 36,009 | ||||||||||||||
Total | $ | 293,084 | $ | 330,087 |
NOTE_6_NOTE_PAYABLE_STOCKHOLDE1
NOTE 6 - NOTE PAYABLE - STOCKHOLDER (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
Note Payable - Stockholder | 31-Dec-14 | 31-Dec-13 | |||||||||||||||
Note Payable | Principal | Interest* | Principal | Interest* | |||||||||||||
Stockholder | $ | 50,000 | 2.5 | % | $ | 50,000 | 2.5 | % | |||||||||
*Interest per month | |||||||||||||||||
NOTE_7_NOTE_PAYABLE_CONVERTIBL1
NOTE 7 - NOTE PAYABLE, CONVERTIBLE OID - RELATED PARTY (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||
NOTES PAYABLE OID | |||||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||||||||||||||
Notes Payable-Convertible | Principal | Unamort | Principal, | Principal | Unamort | Principal, | |||||||||||||||||||
Discount | Net of | Discount | Net of | ||||||||||||||||||||||
Discount | Discount | ||||||||||||||||||||||||
Related Party Affiliate | $ | 66,000 | - | $ | 66,000 | $ | 66,000 | - | $ | 66,000 | |||||||||||||||
NOTE_8_NOTES_PAYABLE_CONVERTIB1
NOTE 8 - NOTES PAYABLE CONVERTIBLE - SHAREHOLDERS (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||
Convertible Notes - Shareholders | |||||||||||||||||||||||||
As of | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Notes Payable - Convertible | Principal | Conversion | Principal, | Principal | Conversion | Principal, | |||||||||||||||||||
to | Net of | to | Net of | ||||||||||||||||||||||
Common | Discount | Common | Discount | ||||||||||||||||||||||
Stock | Stock | ||||||||||||||||||||||||
Shareholder | $ | 68,750 | $ | (68,750 | ) | $ | — | $ | 68,750 | $ | (68,750 | ) | $ | — | |||||||||||
Shareholder | 13,750 | (13,750 | ) | — | 13,750 | (13,750 | ) | — | |||||||||||||||||
$ | 82,500 | $ | (82,500 | ) | $ | — | $ | 82,500 | $ | (82,500 | ) | $ | — |
NOTE_9_NOTES_PAYABLE_CONVERTIB1
NOTE 9 - NOTES PAYABLE, CONVERTIBLE OID - STOCKHOLDER (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||
NOTES PAYABLE OID | 30-Sep-14 | 31-Dec-13 | |||||||||||||||||
Notes Payable - OID | Unamort | Principal, | Principal | Unamort | Principal, | ||||||||||||||
Principal | Discount | Net of | Discount | Net of | |||||||||||||||
Discount | Discount | ||||||||||||||||||
Stockholder | $ | 165,000 | $ | (13,969 | ) | $ | 151,031 | $ | 150,068 | $ | (7,384 | ) | $142,684 | ||||||
NOTE_15_COMMON_STOCK_PURCHASE_1
NOTE 15 - COMMON STOCK PURCHASE WARRANTS AND OPTIONS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
WARRANTS FOR COMMON STOCK | 31-Dec-14 | ||||||||
Shares | Weighted Avg | ||||||||
Exercise Price | |||||||||
Outstanding at beginning of year | 29,859,375 | $ | 0.031 | ||||||
Granted | 17,249,688 | $ | 0.012 | ||||||
Exercised | -7,875,000 | $ | 0.012 | ||||||
Outstanding at end of year | 39,234,063 | $ | 0.02 | ||||||
Exercisable at end of yaer | 39,234,063 | $ | 0.02 | ||||||
STOCK OPTIONS | 31-Dec-14 | ||||||||
Shares | Weighted Avg | ||||||||
Exercise Price | |||||||||
Outstanding at beginning of year | 1,000,000 | $ | 0.03 | ||||||
Granted | 3,150,000 | $ | 0.02 | ||||||
Outstanding at end of year | 4,150,000 | $ | 0.02 | ||||||
Exercisable at end of year | 4,150,000 | $ | 0.02 |
NOTE_16_RECAPITALIZATION_Table
NOTE 16 - RECAPITALIZATION (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Notes to Financial Statements | ||||||||||||||
Recapitalization | ||||||||||||||
Recapitalization | ||||||||||||||
1-Aug-13 | ||||||||||||||
Before | After | |||||||||||||
Par | Authorized | Par | Authorized | |||||||||||
Value | Shares | Value | Shares | |||||||||||
Authorized Shares | ||||||||||||||
Preferred stock | 0.001 | 2,000,000 | 0.001 | 1,000,000 | ||||||||||
Common Stock | 0.001 | 50,000,000 | 0.001 | — | ||||||||||
Common Stock - Class A | 0.001 | — | 0.001 | 450,000,000 | ||||||||||
Common Stock - Class B | 0.001 | — | 0.001 | 50,000,000 | ||||||||||
Total Authorized Shares | 52,000,000 | 501,000,000 | ||||||||||||
Issued and Outstanding | ||||||||||||||
Preferred stock | 0.001 | — | 0.001 | — | ||||||||||
Common Stock | 0.001 | 164,789 | 0.001 | — | ||||||||||
Common Stock - Class A | 0.001 | — | 0.001 | 321,867 | ||||||||||
Common Stock - Class B | 0.001 | — | 0.001 | 57,500 | ||||||||||
Total Authorized Shares | 164,789 | 379,367 |
NOTE_17_INCOME_TAXES_Tables
NOTE 17 - INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Deferred Tax | |||||||||
Year ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Deferred tax assets: | |||||||||
Net operating losses | $ | 1,927,502 | $ | 1,698,286 | |||||
Allowance for bad debts | - | 2,066 | |||||||
Stock options | - | 6,167 | |||||||
Capital loss carryover | — | — | |||||||
Common Stock for Services | — | — | |||||||
Deferred revenue | — | — | |||||||
Valuation allowance | (1,927,502 | ) | (1,691,298 | ) | |||||
Net deferred tax assets | $ | - | $ | 15,221 | |||||
Total deferred tax liabilities | - | (15,221 | ) | ||||||
Total net deferred taxes | $ | — | $ | — | |||||
Income Tax (loss) - Federal statutory rate | |||||||||
Year ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Income tax (loss) at federal statutory rate | (34.00 | )% | (34.00 | )% | |||||
State taxes, net of federal benefit | (3.63 | )% | (3.63 | )% | |||||
Nondeductible items | (5.5 | )% | (93.37 | % | |||||
Changes in valuation allowance | 32.1 | % | 131 | % | |||||
0 | % | 0 | % |
NOTE_1_NATURE_OF_OPERATIONS_AN3
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Customer and Concentration of Credit Risk (Details) | Dec. 31, 2014 | Dec. 31, 2013 |
Notes to Financial Statements | ||
Revenue - Customer A | 66.00% | 49.00% |
Revenue Customer B | 17.00% | 18.00% |
Accounts Receivable Customer A | 100.00% | 68.00% |
Accounts Receivable Customer B | 0.00% | 22.00% |
NOTE_3_ACCOUNTS_RECEIVABLE_AND2
NOTE 3 - ACCOUNTS RECEIVABLE AND FACTORING - Accounts Receivable (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Notes to Financial Statements | ||
Accounts Receivable balance | $39,289 | $32,186 |
Factored Accounts Receivable | ||
Allowance for Doubtful Accounts | -5,490 | |
Accounts Receivable, net | $39,289 | $26,696 |
NOTE_4_PROPERTY_AND_EQUIPMENT_1
NOTE 4 - PROPERTY AND EQUIPMENT - PROPERTY AND EQUIPMENT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Abstract] | ||
Computer software (purchased) | $590 | $590 |
Website development costs | 10,072 | 10,072 |
Furniture, fixtures, and equipment | 33,218 | 40,712 |
Leasehold improvements | 1,664 | 1,664 |
Total property and equipment | 45,544 | 53,038 |
Less accumulated depreciation and amortization | -43,926 | -40,447 |
Net property and equipment | $1,618 | $12,591 |
NOTE_5_NOTES_PAYABLE_RELATED_P2
NOTE 5 - NOTES PAYABLE - RELATED PARTIES - NOTES PAYABLE b RELATED PARTIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Notes to Financial Statements | ||
Related party | $241,915 | $274,078 |
Interest | 250.00% | 250.00% |
Related party I | 1500000.00% | 2000000.00% |
Interest I | 150.00% | 150.00% |
Related party II | 9,843 | 0 |
CEO b Related Party | 26,326 | 36,009 |
Total | $293,084 | $330,087 |
NOTE_6_NOTE_PAYABLE_STOCKHOLDE2
NOTE 6 - NOTE PAYABLE - STOCKHOLDER - (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Notes to Financial Statements | ||
Stockholder Notes Payable (principal) | $50,000 | $50,000 |
Interest on notes | 250.00% | 250.00% |
NOTE_7_NOTE_PAYABLE_CONVERTIBL2
NOTE 7 - NOTE PAYABLE, CONVERTIBLE OID - RELATED PARTY - NOTES PAYABLE OID (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Notes to Financial Statements | ||
Principal - shareholder A | $68,750 | |
Convertion - Shareholder A | -68,750 | |
Principal, Net - Shareholder A | ||
Principal - shareholder B | 13,750 | |
Convertion - Shareholder B | -13,750 | |
Principal, Net - Shareholder B |
NOTE_8_NOTES_PAYABLE_CONVERTIB2
NOTE 8 - NOTES PAYABLE CONVERTIBLE - SHAREHOLDERS - Convertible Notes - Shareholders (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Notes to Financial Statements | ||
Shareholder | $68,750 | ($68,750) |
Shareholder | $13,750 | ($13,750) |
NOTE_9_NOTES_PAYABLE_CONVERTIB2
NOTE 9 - NOTES PAYABLE, CONVERTIBLE OID - STOCKHOLDER - (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Notes to Financial Statements | ||
Notes payable principal | $165,000 | $150,068 |
Unamort Discount | -13,969 | -7,384 |
Principal Net of Discount | $151,031 | $142,684 |
NOTE_17_INCOME_TAXES_Deferred_
NOTE 17 - INCOME TAXES - Deferred Tax (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred tax assets: | ||
Net operating losses | $1,927,502 | $1,698,286 |
Allowance for bad debts | 2,066 | |
Stock options | 6,167 | |
Capital loss carryover | ||
Common Stock for Services | ||
Deferred revenue | ||
Valuation allowance | -1,927,502 | -1,691,298 |
Net deferred tax assets | 15,221 | |
Total deferred tax liabilities | -15,221 | |
Total net deferred taxes |
NOTE_17_INCOME_TAXES_Income_Ta
NOTE 17 - INCOME TAXES - Income Tax (loss) - Federal statutory rate (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||
Income tax (loss) at federal statutory rate | -3400.00% | -3400.00% |
State taxes, net of federal benefit | -363.00% | -363.00% |
Nondeductible items | -550.00% | -9337.00% |
Changes in valuation allowance | 3210.00% | 13100.00% |
NOTE_18_SUBSEQUENT_EVENTS_Deta
NOTE 18 - SUBSEQUENT EVENTS (Details) (USD $) | Mar. 31, 2015 |
Subsequent Events [Abstract] | |
COMMON STOCK A - B COMBINED | $500,000,000 |
PAR VALUE | $0.00 |
PERFERRED STOCK AUTHORIZED | $10,000,000 |
PAR VALUE | $0.00 |
NOTE_2_GOING_CONCERN_Details_N
NOTE 2 - GOING CONCERN (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Notes to Financial Statements | ||
Net Loss | ($735,223) | ($648,567) |
Cash Used | 297,920 | |
Working Capital Deficit | 1,049,955 | |
Stockholders' Deficit | 1,048,337 | |
Accumulated Deficit | $6,087,509 |
NOTE_3_ACCOUNTS_RECEIVABLE_AND3
NOTE 3 - ACCOUNTS RECEIVABLE AND FACTORING (Details Narrative) (USD $) | 11 Months Ended | 12 Months Ended | |
Dec. 11, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | |
Notes to Financial Statements | |||
Factor Advances | 0.8 | ||
Reserve Held Back by Factoring | 0.2 | ||
Factor Fee | 0.03 | ||
Accounts Receivable Factored | $5,978 | $479,248 | |
Factor Fees Incurred | 1,386 | 25,667 | |
Accounts Receivable | $0 | $0 |
NOTE_4_PROPERTY_AND_EQUIPMENT_2
NOTE 4 - PROPERTY AND EQUIPMENT (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation Expense | $4,126 | $5,715 |
Fixed assets sold | 1,725 | |
Loss | $5,122 |
NOTE_5_NOTES_PAYABLE_RELATED_P3
NOTE 5 - NOTES PAYABLE - RELATED PARTIES (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||
Nov. 20, 2014 | Jul. 24, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 21, 2014 | Oct. 14, 2014 | Aug. 01, 2014 | 30-May-14 | 14-May-14 | 7-May-13 | Feb. 15, 2013 | Aug. 30, 2012 | Aug. 15, 2012 | Jun. 27, 2012 | |
Notes to Financial Statements | ||||||||||||||||
Related party Loan | $20,000 | $100,000 | ||||||||||||||
Increase based on purchase orders/invoices | 300,000 | |||||||||||||||
rate | 250.00% | |||||||||||||||
Conversion of original note | 100,000 | |||||||||||||||
Stock conversion rate | 2.4 | |||||||||||||||
Shares received | 41,667 | |||||||||||||||
warrants | 6,250,000 | |||||||||||||||
percentage rate | 75.00% | |||||||||||||||
price | $0.01 | |||||||||||||||
Interest payment | 100,000 | |||||||||||||||
Allocation amount | 47,445 | |||||||||||||||
Allocaiton amount 2 | 57,555 | |||||||||||||||
Notes Issued | 28,040 | |||||||||||||||
Principal Amount | 25,000 | |||||||||||||||
Additional advance | 3,040 | |||||||||||||||
Interest rate | 0.03 | 1.5 | ||||||||||||||
Principal | 58,059 | |||||||||||||||
Accrued Interest | 7,157 | 17,923 | ||||||||||||||
Conversion to common stock | 84,653 | |||||||||||||||
Stock Value | 152,322 | |||||||||||||||
Debt Conversion (loss) | 72,277 | |||||||||||||||
Outstanding Principal | 58,059 | |||||||||||||||
Accrued Interest 1 | 21,986 | |||||||||||||||
Conversion to shares - common stock | 84,653 | |||||||||||||||
Fair Value | 152,322 | |||||||||||||||
Loss on debt conversion | 72,277 | 150,274 | ||||||||||||||
Outstanding principal balance | 241,915 | 274,078 | ||||||||||||||
Accrued interest | 7,157 | 17,923 | ||||||||||||||
Loan - COO | 10,000 | |||||||||||||||
Advance Related Party | 15,000 | |||||||||||||||
Related party - loan | 20,000 | 100,000 | ||||||||||||||
discount interest rate | 2 | |||||||||||||||
Payment by related party | 5,000 | |||||||||||||||
Balance - principal | 15,000 | 20,000 | ||||||||||||||
Accrued interest 2 | 0 | |||||||||||||||
Note - OID | 9,843 | 10,000 | ||||||||||||||
Accrued interest on OID note | 593 | |||||||||||||||
RecReclassification of accounts payable | 30,265 | |||||||||||||||
Accrued payroll | 54,682 | 124,604 | 31,647 | |||||||||||||
Outstanding loan balances | $26,326 | $36,009 |
NOTE_6_NOTE_PAYABLE_STOCKHOLDE3
NOTE 6 - NOTE PAYABLE - STOCKHOLDER (Details Narrative) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 02, 2013 | Jun. 28, 2012 | Jan. 11, 2012 |
Notes to Financial Statements | |||||
Notes payable - Shareholders | $50,000 | $50,000 | |||
revolving rate - Interest | 3.00% | ||||
interest rate payable | 150.00% | ||||
penalty fee rate | 150.00% | ||||
Principal payment made | 10,000 | ||||
Reduction of penalty fee maximum | 150.00% | ||||
Reduction of penalty fee minimum | 100.00% | ||||
Accrued interest | $6,250 | $2,485 |
NOTE_7_NOTE_PAYABLE_CONVERTIBL3
NOTE 7 - NOTE PAYABLE, CONVERTIBLE OID - RELATED PARTY - NOTES PAYABLE OID (Details Narrative) (USD $) | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Aug. 15, 2012 | Jun. 10, 2012 | Jul. 15, 2011 | |
Notes to Financial Statements | |||||
Non Interest bearing short term loan | $60,000 | ||||
Notes Payable b Convertible | 66,000 | 66,000 | |||
Discount | 6,000 | ||||
shares issued on conversion of note | 19,800 | ||||
Conversion rate | 334.00% | 6600.00% | |||
Fair Value of note | 28,571 | ||||
Warrants purchased | 3,959,921 | ||||
exercise price | $0.33 | ||||
Fair value of Warants | $31,429 | ||||
Dividen | 0.00% | ||||
Volatility | 462.61% |
NOTE_9_NOTES_PAYABLE_CONVERTIB3
NOTE 9 - NOTES PAYABLE, CONVERTIBLE OID - STOCKHOLDER - (Details Narrative) (USD $) | 12 Months Ended | |||||||
Dec. 31, 2014 | Dec. 31, 2013 | Jul. 14, 2015 | Sep. 08, 2014 | Feb. 08, 2013 | Aug. 15, 2012 | Jul. 15, 2012 | Jul. 15, 2011 | |
Notes to Financial Statements | ||||||||
Stockholder (note received) | $125,000 | |||||||
Face Value of Note | 165,000 | 137,500 | ||||||
Debt discount | 12,500 | |||||||
Amount of Shares converted | 20,625 | |||||||
Conversion rate | 334.00% | 6600.00% | ||||||
Warrants to purchase shares (5 years) | 3,750,000 | |||||||
Exercise price | $0.33 | |||||||
Value of warrants | 62,500 | |||||||
Risk free interest rate | 146.00% | |||||||
Maturity of orginal note | 137,500 | |||||||
Face Value of note | 165,000 | 137,500 | ||||||
Discount Issued | 27,500 | |||||||
Liquid Capital Exchange agreement | 5.00% | |||||||
Forbearance agreement to extend original note | 165,000 | |||||||
Discount expense | 14,932 | |||||||
Penalty on outstanding balance (non-payment) | 25.00% | |||||||
Warrantes issued for extension of agreement | 1,500,000 | |||||||
Share value | $0.01 | |||||||
Fair value of shares (BlackScholes pricing model) | $11,900 | |||||||
Dividen yield | 0 | |||||||
Risk free interest | 165.00% | |||||||
Note Net carried value | 151,031 | 142,684 | ||||||
Unamortized original discount | 8,019 | |||||||
Warrant discount | $5,950 | $7,384 |
NOTES_PAYABLE_THIRD_PARTY_Deta
NOTES PAYABLE - THIRD PARTY (Details Narrative) (USD $) | Dec. 31, 2014 | Sep. 01, 2014 | Aug. 08, 2014 | Dec. 31, 2013 | 7-May-13 |
Notes to Financial Statements | |||||
Third Party Loan | $45,000 | ||||
Interest Rate | 0.03 | 1.5 | |||
Repayment | 0.5 | ||||
Balance of note | 37,996 | 39,979 | |||
Deposit made by ISA | 50,000 | 50,000 | |||
Future receivable | 62,400 | ||||
Monthly payment amount | 4,800 | ||||
Unamortized discount | 8,545 | ||||
Principal amount due | $43,200 |
NOTE_11_LINE_OF_CREDIT_Details
NOTE 11 - LINE OF CREDIT (Details Narrative) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | 7-May-13 |
Debt Disclosure [Abstract] | |||
Line of Credit - Wells Fargo Bank | $37,996 | $39,979 | |
Balance | $37,996 | $39,979 | |
Interest Rate | 0.03 | 1.5 |
NOTE_12_COMMITMENTS_AND_CONTIN1
NOTE 12 - COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 13 Months Ended | 24 Months Ended | ||||||
Jul. 31, 2012 | Jul. 15, 2014 | Jul. 31, 2016 | Jul. 31, 2013 | Jul. 31, 2015 | Jul. 31, 2014 | Dec. 31, 2014 | Sep. 01, 2014 | Aug. 01, 2014 | 9-May-14 | Dec. 31, 2013 | |
Notes to Financial Statements | |||||||||||
Lease Agreement | $1,800 | $1,920 | $2,040 | ||||||||
Termination of lease | 6,091 | ||||||||||
Issued note for payment of lease | 4,401 | ||||||||||
Monthly payments | 600 | ||||||||||
Rent deposit | 1,690 | ||||||||||
Balance on Lease | 2,965 | ||||||||||
Final payment on lease agreement | 201 | ||||||||||
Security deposit - New Office | 1,200 | ||||||||||
Monthly Rental rate | 1,260 | 1,200 | |||||||||
Rental expense | $24,887 | $26,527 |
NOTE_14_STOCKHOLDERS_DEFICIT_D
NOTE 14 - STOCKHOLDERS DEFICIT (Details Narrative) (USD $) | Jan. 04, 2014 | Dec. 31, 2013 |
Equity [Abstract] | ||
Subscription Receivable | $100,000 | |
Issuable Common Stock | 41,667 |
NOTE_17_INCOME_TAXES_Details_N
NOTE 17 - INCOME TAXES (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Loss Carry Forward | $4,513,000 |
Valuation Allowance Increase | $854,986 |
Valuation Allowance percent | 1 |
Benefit computed at Federal statuory rate | 0.34 |
NOTE_18_SUBSEQUENT_EVENTS_Deta1
NOTE 18 - SUBSEQUENT EVENTS (Details Narrative) (USD $) | Apr. 01, 2015 | Mar. 31, 2015 |
Subsequent Events [Abstract] | ||
Common Stock Issued | 25,000 | |
Common Stock Increased | 500,000,000 | |
Preferred Stock Increased | 10,000,000 | |
Authorized Shares Upon Conversion | 501,811 | |
Common Stock Authorized to be Issued | 390,626 | |
Notes Payable Upon Conversion | 250,000 | |
Common Stock To Be Issued For Accounts Payable and Future Services | 312,500 | |
Future Payments for Accounts Payable and Services | $107,500 | |
Issuance O fCommon Stock In Exchange For Warrants | 127,366 | |
Exchange For Stock Option | $14,750 | |
Common Stock Issued For Accrued Salaries | 175,044 | |
Common Stock Issues To Executive Officers and Directors | 170,000 | |
Outstanding And Issuable Stock Upon Merger | 2,500,000 | |
Reverse Split Ratio - Minium | 1 | |
Reverse Split Ratio1 - Maxium | 200 | |
Distribution of Shares to Shareholders of DUOS | 60,000,000 |