Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 14, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Duos Technologies Group, Inc. | |
Entity Central Index Key | 1,396,536 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer | No | |
Is Entity a Voluntary Filer | No | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 66,070,698 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash | $ 69,567 | $ 140,129 |
Accounts receivable | 726,289 | 452,235 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 344,430 | 421,116 |
Prepaid expenses and other current assets | 137,807 | 165,095 |
Total Current Assets | 1,278,093 | 1,178,575 |
Property and equipment, net | 73,937 | 72,544 |
OTHER ASSETS: | ||
Patents and trademarks, net | 52,832 | 57,006 |
Total Other Assets | 52,832 | 57,006 |
TOTAL ASSETS | 1,404,862 | 1,308,125 |
CURRENT LIABILITIES: | ||
Accounts payable | 1,213,902 | 1,061,961 |
Accounts payable - related parties | 36,400 | 30,070 |
Commercial insurance/office equipment financing | 87,472 | 44,024 |
Notes payable - related parties | 611,352 | 486,964 |
Notes payable | 49,108 | 196,608 |
Convertible notes payable, including premiums | 193,950 | 193,950 |
Line of credit | 38,827 | 40,216 |
Payroll taxes payable | 408,186 | 296,215 |
Accrued expenses | 1,253,208 | 955,570 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 541,836 | 303,064 |
Deferred revenue | 745,251 | 908,206 |
Contingent lawsuit payable | 550,000 | |
Total Current Liabilities | 5,179,492 | 5,066,848 |
Notes payable, net of discounts | 1,140,582 | |
Total Liabilities | 6,320,074 | 5,066,848 |
Commitments and Contingencies (Note 5) | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, $0.001 par value 10,000,000 authorized, none issued or outstanding | ||
Common stock: $0.001 par value; 500,000,000 shares authorized 66,070,698 and 64,777,621 shares issued and issuable, and outstanding at September 30, 2016 and December 31, 2015, respectively | 66,071 | 64,778 |
Additional paid-in capital | 18,062,451 | 17,127,675 |
Accumulated deficit | (23,043,734) | (20,951,176) |
Total Stockholders' Deficit | (4,915,212) | (3,758,723) |
Total Liabilities and Stockholders' Deficit | $ 1,404,862 | $ 1,308,125 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
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 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 66,070,698 | 64,777,621 |
Common stock, shares outstanding | 66,070,698 | 64,777,621 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
REVENUES: | ||||
Project | $ 594,096 | $ 1,366,565 | $ 1,707,177 | $ 2,891,198 |
Maintenance and technical support | 618,682 | 665,670 | 1,829,595 | 1,852,001 |
IT asset management services | 154,391 | 209,965 | 481,783 | 209,965 |
Total Revenues | 1,367,169 | 2,242,200 | 4,018,555 | 4,953,164 |
COST OF REVENUES: | ||||
Project | 303,126 | 653,194 | 821,264 | 1,517,578 |
Maintenance and technical support | 262,830 | 255,920 | 727,529 | 693,709 |
IT asset management services | 79,199 | 94,747 | 254,730 | 94,747 |
Total Cost of Revenues | 645,155 | 1,003,861 | 1,803,523 | 2,306,034 |
GROSS PROFIT | 722,014 | 1,238,339 | 2,215,032 | 2,647,130 |
OPERATING EXPENSES: | ||||
Selling and marketing expenses | 62,116 | 64,219 | 227,785 | 208,283 |
Salaries, wages and contract labor | 758,685 | 686,081 | 2,583,419 | 1,907,934 |
Research and development | 72,288 | 65,831 | 201,668 | 157,328 |
Professional fees | 59,803 | 108,421 | 229,277 | 233,553 |
General and administrative expenses | 198,715 | 249,363 | 622,851 | 738,531 |
Impairment loss | 1,578,816 | |||
Total Operating Expenses | 1,151,607 | 1,173,915 | 3,865,000 | 4,824,445 |
INCOME (LOSS) FROM OPERATIONS | (429,593) | 64,424 | (1,649,968) | (2,177,315) |
OTHER INCOME (EXPENSES): | ||||
Interest expense | (161,515) | (273,750) | (443,929) | (839,962) |
Gain on settlement of accounts payable | 3,200 | |||
Other income, net | 34 | 2 | 1,340 | 8 |
Total Other Income (Expense) | (161,481) | (273,748) | (442,589) | (836,754) |
NET LOSS | $ (591,074) | $ (209,324) | $ (2,092,558) | $ (3,014,069) |
NET LOSS APPLICABLE TO COMMON STOCK PER COMMON SHARE: | ||||
Basic | $ (0.01) | $ 0 | $ (0.03) | $ (0.05) |
Diluted | $ (0.01) | $ 0 | $ (0.03) | $ (0.05) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic | 66,025,986 | 61,831,726 | 65,844,312 | 60,288,922 |
Diluted | 66,025,986 | 61,831,726 | 65,844,312 | 60,288,922 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash from operating activities: | ||
Net Loss | $ (2,092,558) | $ (3,014,069) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 35,262 | 91,372 |
Gain on settlement of accounts payable | 3,200 | |
Stock and warrants issued for services | 125,036 | 123,775 |
Interest expense related to premium/debt discounts and conversion of notes payable | 131,884 | |
Loss on settlement of debt | 197,123 | |
Amortization of stock based prepaid consulting fees | 418,119 | 17,854 |
Loss related to warrants exchanged for stock | 630 | |
Impairment loss | 1,578,816 | |
Changes in assets and liabilities: | ||
Accounts receivable | (274,054) | (852,132) |
Costs and estimated earnings on uncompleted contracts | 76,686 | (99,841) |
Prepaid expenses and other current assets | 108,347 | (133,231) |
Accounts payable | 150,544 | (123,693) |
Accounts payable-related party | 6,330 | (20,663) |
Payroll taxes payable | 111,971 | (285,175) |
Accrued expenses | 157,638 | 348,818 |
Contingent lawsuit liability | (550,000) | |
Billings in excess of costs and earnings on uncompleted contracts | 238,772 | 377,905 |
Deferred revenue | (162,955) | (213,298) |
Net cash used in operating activities | (1,518,348) | (2,003,239) |
Cash flows from investing activities: | ||
Cash acquired in acquisition | 1,346 | |
Purchase of patents/trademarks | (70) | (11,470) |
Purchase of fixed assets | (32,411) | (107,401) |
Net cash used in investing activities | (32,481) | (117,525) |
Cash flows from financing activities: | ||
Proceeds from borrowings under convertible notes and other debt | 1,374,498 | |
Proceeds from bank line of credit | 40,214 | |
Proceeds of advance payments-stock repurchase | 140,000 | |
Proceeds from related party notes | 221,570 | 591,697 |
Repayments of related party notes | (97,182) | |
Proceeds (repayments) of insurance and equipment financing | (154,621) | 43,408 |
Repayments of notes payable | (147,500) | |
Proceeds of notes payable | 1,518,000 | |
Net cash provided by financing activities | 1,480,267 | 2,049,817 |
Net decrease in cash | (70,562) | (70,947) |
Cash, beginning of period | 140,129 | 85,435 |
Cash, end of period | 69,567 | 14,488 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid | 125,687 | 33,211 |
Taxes paid | 10,149 | 800 |
Supplemental Non-Cash Investing and Financing Activities: | ||
Common stock issued to settle notes payable and accrued interest | 2,215,959 | |
Common stock issued for prepaid consulting services | 301,100 | |
Common stock issued to settle accounts payable | 16,800 | |
Common stock issued for accrued salary | 56,482 | |
Reclassification of put premium liability on convertible notes to paid-in capital | 37,120 | |
Increase in debt discount and paid-in capital for warrants issued with debt | 509,303 | 30,722 |
Note issued for financing of insurance premiums | 198,089 | |
Debt discount associated with notes payable | 282,000 | |
Liabilities assumed in share exchange | 1,186,234 | |
Less: assets acquired in share exchange | (1,347) | |
Net liabilities assumed | 1,184,887 | |
Fair value of shares exchanged | 393,929 | |
Increase in intangible assets | $ 1,578,816 |
NOTE 1 - NATURE OF OPERATIONS,
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Duos Technologies Group, Inc. (Company), through its operating subsidiary Duos Technologies, Inc. (duostech) is primarily engaged in the design and deployment of state-of-the-art, artificial intelligence driven intelligent technologies systems. duostech converges traditional security measures with information technologies to create actionable intelligence. duostechs IP is built upon two of its core technology platforms (praes i ® t i ® t The Companys strategy includes expansion of its technology base through organic development efforts, strategic partnerships, and growth through strategic acquisitions. duostechs primary target industry sectors include transportation, with emphasis on freight and transit railroad owners/operators, petro-chemical, utilities and healthcare. As reported previously, Duos Technologies Group, Inc. is the result of the reverse merger between duostech and a wholly owned subsidiary of Information Systems Associates, Inc., a Florida corporation (ISA), which became effective as of April 1, 2015 and as a result of which duostech became a wholly owned subsidiary of the merged entity. The merger was followed by a corporate name change to Duos Technologies Group, Inc., a symbol change from IOSA to DUOT and up-listing from OTC Pink to OTCQB. ISAs original business of IT Asset Management (ITAM) services for large data centers is now operated as a division of the Company that continues its sales efforts through large strategic partners. ISA developed a methodology for the efficient data collection of assets contained within large data centers and was awarded a patent in 2010 for specific methods to collect and audit data. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (all of which are of a normal recurring nature) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2016 are not indicative of the results that may be expected for the year ending December 31, 2016 or for any other future period. These unaudited consolidated financial statements and the unaudited condensed notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission (the SEC) on April 1, 2016. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, duostech and TrueVue 360, Inc. All 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. The most significant estimates in the accompanying consolidated financial statements include the allowance on accounts receivable, valuation of deferred tax assets, valuation of assets acquired and liabilities assumed in business combinations, estimates of percentage completion on projects and related revenues, valuation of stock-based compensation, valuation of warrants issued with debt, valuation of beneficial conversion features in convertible debt, valuation of stock-based awards and valuation of loss contingencies. 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. Concentrations Cash Concentrations Cash is 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 September 30, 2016 and December 31, 2015. Significant Customers and Concentration of Credit Risk The Company, by policy, routinely assesses the financial strength of its customers. As a result, the Company believes that its accounts receivable credit risk exposure is limited and has not experienced any write-downs in its accounts receivable balances through September 30, 2016. 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 for the nine months ended September 30, 2016 and 2015, and total accounts receivable at September 30, 2016 and December 31, 2015, respectively: 2016 2015 Revenue Accounts Receivable Revenue Accounts Receivable Customer A 31 % Customer A Customer A 22 % Customer A 27 % Customer B 20 % Customer B 57 % Customer B 14 % Customer B Customer C 16 % Customer C 14 % Customer C Customer C Customer D 16 % Customer D Customer D Customer D Customer E 11 % Customer E 11 % Customer E Customer E Customer F Customer F Customer F Customer F 33 % Customer G Customer G Customer G 21 % Customer G Customer H Customer H Customer H 20 % Customer H Customer I Customer I Customer I Customer I 24 % Geographic Concentration Approximately 18% of revenue is generated from customers outside of the United States. 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, 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. The estimated fair value of certain financial instruments, including accounts receivable and accounts payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The cost basis of notes and convertible debentures approximates fair value due to the market interest rates carried for these instruments. Earnings (Loss) Per Share Basic earnings per share (EPS) are computed by dividing net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options, stock warrants, convertible debt instruments or other common stock equivalents. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. At September 30, 2016, outstanding warrants to purchase an aggregate of 3,600,840 shares of common stock and 1,819,418 shares of common stock issuable upon conversion of convertible debt (principal and interest) were excluded from the computation of dilutive earnings per share because the inclusion would have been anti-dilutive. Segment Information The Company operates in one reportable segment. Reclassifications Certain note amounts in the 2015 consolidated balance sheet have been reclassified within current liabilities to conform to the 2016 presentation. Recent Issued Accounting Standards In August 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-14 Revenue from Contracts with Customers. The ASU defers the effective date of previously issued ASU 2014-09 (the new revenue recognition standard) by one year for both public and private companies. The ASU requires public entities to apply the new revenue recognition guidance for annual reporting periods beginning after December 15, 2017, and interim reporting periods within annual reporting periods beginning after December 15, 2017. Both public and nonpublic entities will be permitted to apply the new revenue recognition standard as of the original effective date for public entities (annual periods beginning after December 15, 2016). The Company plans to adopt this standard for their fiscal year beginning January 1, 2018. The Company is in the process of analyzing the impacts of this ASU, but does not believe it will have a material impact on its consolidated financial statements. In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. 2016-02: Leases (Topic 842) In March 2016, the FASB issued Accounting Standards Update No. 2016-09: "Compensation Stock Compensation (Topic 718) - I |
NOTE 2 - GOING CONCERN
NOTE 2 - GOING CONCERN | 9 Months Ended |
Sep. 30, 2016 | |
NOTE 2 - GOING CONCERN [Abstract] | |
NOTE 2 - GOING CONCERN | NOTE 2 GOING CONCERN As reflected in the accompanying unaudited consolidated financial statements, the Company had a net loss of $2,092,558 for the nine months ended September 30, 2016. During the same period, cash used in operations was $1,518,348. The working capital deficit, stockholders deficit and accumulated deficit as of September 30, 2016 was $3,901,399, $4,915,212 and $23,043,734, respectively. These matters raise substantial doubt about the Companys ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Companys ability to further implement its business plan, raise additional capital and become profitable. Management embarked on a business growth strategy in 2014 to engage with private companies in or related to its market space with the intention of a merger or acquisition. In April 2015, the Company completed a reverse triangular merger whereby duostech became a wholly owned subsidiary of the Company. The two companies are now integrated and the merged company continues to grow its business in all of the markets where they have previously operated. The Company was successful on April 1, 2016 in closing long-term debt financing of $1.8 million for the purposes of settling certain current debt and payables obligations. Net proceeds after placement agency fees, legal fees, due diligence expenses and direct payments from the lender to certain creditors of the Company were $837,891. (See Note 3) Additionally, during the reporting period, the Companys Board of Directors approved a new class of Preferred Stock, Series A. The Articles of Amendment Designating Preferences, Rights and Limitations of the Series A were filed with State on October 31, 2016. The Series A designated 500,000 of the Companys 10 million blank check preferred stock with a stated value of $10 per share, an 8% cumulative dividend payable when and if declared by the Board and a provision to convert into the Companys common stock at $0.18 per share. If the holder elects to convert the Series A to common stock, the cumulative dividend amount will also be converted to common stock. The Series A is redeemable by the holder after 3 years including all unconverted stated value and accrued dividends. For shareholders who invested in previous private placements, the Company is offering on a case by case basis, the ability to convert the existing amount invested into an equivalent amount in the Series A on the condition that they invest an equivalent additional amount in the Series A. The company continues in discussions with certain potential investors with a view to obtaining equity financing to invest in resources to support and accelerate our growth from anticipated orders and provide additional working capital. (See Note 9) While no assurance can be provided, management believes that these actions provide the opportunity for the Company to continue as a going concern and to grow its business and achieve profitability. Ultimately however, the continuation of the Company as a going concern is dependent upon the ability of the Company to execute the plan described above, generate sufficient revenue and to attain profitable operations. These unaudited, consolidated financial statements do not include any adjustments related 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 - DEBT
NOTE 3 - DEBT | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
NOTE 3 - DEBT | NOTE 3 DEBT Notes Payable - Financing Agreements The Companys notes payable relating to financing agreements classified as current liabilities consist of the following as of: September 30, 2016 December 31, 2015 Payable To Principal Interest Principal Interest Third Party - Insurance Note 1 $ 2,211 9.75 % $ 21,325 9.75 % Third Party - Insurance Note 2 19,065 10.00 % 11,277 9.75 % Third Party - Insurance Note 3 37,943 8.05 % Third Party - Insurance Note 4 28,253 9.24 % 11,422 8.99 % Total $ 87,472 $ 44,024 The Company entered into an agreement on December 23, 2015 with its insurance provider by executing a $21,325 note payable (Insurance Note 1) issued to purchase an insurance policy with an annual interest rate of 9.75% payable in monthly installments of principal and interest totaling $2,229 through October 23, 2016. The note balance as of September 30, 2016 and December 31, 2015 was $2,211 and $21,325, respectively. The Company entered into an agreement on September 15, 2015 with its insurance provider by executing an $18,823 note payable (Insurance Note 2) issued to purchase an insurance policy with an annual interest rate of 9.75% payable in monthly installments of principal and interest totaling $1,678 through July 15, 2016. The Company renewed the note payable on September 15, 2016 in the amount of $19,065 with an annual interest rate of 10% payable in monthly installments of principal and interest totaling $1,702 through June 30, 2017. The note balance as of September 30, 2016 and December 31, 2015 was $19,065 and $11,277, and respectively. The Company renewed an agreement on February 3, 2016 with its insurance provider by executing a $123,571 note payable (Insurance Note 3) issued to purchase an insurance policy with an annual interest rate of 8.05% payable in monthly installments of principal and interest totaling $12,818 through December 3, 2016. At September 30, 2016 and December 31, 2015, the note payable balance was $37,943 and zero, respectively. The Company renewed an agreement on April 1, 2016 with its insurance provider by executing a $65,000 note payable (Insurance Note 4) issued to purchase an insurance policy with an annual interest rate of 9.24% payable in monthly installments of principal and interest totaling $5,782 through February 1, 2017. At September 30, 2016 and December 31, 2015, the note payable balance was $28,253 and $11,422, respectively, with the $11,422 balance relating to the April 1, 2015 note with the same provider with an annual interest rate of 8.99%. Notes Payable - Related Parties The Companys notes payable to related parties classified as current liabilities consist of the following as of: September 30, 2016 December 31, 2015 Payable To Principal Interest* Principal Interest* Related party $ 65,000 .75 % $ 65,000 .75 % Related party 13,369 .67 % 17,651 .67 % Related party 16,808 33,615 Related party 56,500 .67 % 36,500 .67 % Related party 7,670 21,170 Related party 8,431 .67 % 11,131 .67 % CFO 31,973 .67 % 7,841 Related party 241,346 .50 % 294,056 .50 % CEO 58,610 .67 % Related party 111,645 .67 % Total $ 611,352 $ 486,964 * effective interest rate per month including default penalties On May 28, 2008, a shareholder who is indirectly invested in the Company with the Chief Executive Officer (CEO) through another entity, loaned the Company the principal amount of $65,000 accruing interest at .75% per month. There was an accrued interest balance of $47,768 and $43,381 as of September 30, 2016 and December 31, 2015, respectively. The note was repayable on or before September 15, 2008 although no demand for repayment has been received from the holder. There is no formal written agreement and the terms are documented on a letter from a former Chief Financial Officer (CFO) of the Company. The terms contain no default clauses and as of the time of this report, no demand for repayment has been made or expected. The Company intends to either negotiate a conversion of the outstanding amount to common stock or to repay the loan when sufficient working capital permits such action. Upon the consummation of the merger on April 1, 2015, the Company assumed an Original Issue Discount (OID) promissory note with a remaining principal balance of $15,000 accruing interest at 1.5% per month. On November 30, 2015, there was an outstanding principal balance of $15,000 and an accrued interest balance of $2,651 in which the promissory note was restructured into a note due on or before December 15, 2016 for a total of $17,651 principal balance, accruing interest at .67% per month and monthly payments of $1,535 commencing January 15, 2016. As of September 30, 2016, the outstanding balance was $13,369. Upon the consummation of the merger on April 1, 2015, the Company assumed two promissory notes due to an entity which had previously extended credit on a revolving basis for working capital. The total principal balance was $212,693 at the time of the merger and carried total interest and extension fees of 2.5% per month. On September 30, 2015, the note and accrued interest for a total of $275,660 was exchanged for 1,002,401 common shares. The Company recorded a loss on settlement in the amount of $115,139. The same lender had extended further credit to the Companys subsidiary, TrueVue360, Inc., which on September 30, 2015 had a principal balance of $28,040 and accrued interest balance of $9,777 totaling $37,817. The note can be extended each time for an additional 30 days subject to payment of a 1% extension fee in addition to the 1.5% interest cost which can be accrued. The Company agreed to convert this note to an 18-month term loan with 0% interest and monthly payments of $2,100 starting November 1, 2015. The Company also issued 501,201 5-year warrants with an exercise price of $0.28 as consideration for the conversion of the larger note and the zero interest feature of the extended payment plan. As of September 30, 2016, the outstanding balance was $16,808. On December 12, 2013, the wife of the CEO loaned the Company the sum of $10,000 at a monthly percentage rate of .67%. On January 29, 2015, March 3, 2015 and September 30, 2015 the wife of the CEO loaned the Company an additional $12,000, $5,000 and $9,500, respectively. On January 24, 2016, an additional $20,000 was loaned to the Company. The total principal due at September 30, 2016 and December 31, 2015 was $56,500 and $36,500, respectively. There was an accrued interest balance of $6,344 and $3,052 as of September 30, 2016 and December 31, 2015, respectively. The note is repayable on demand of the holder. As of the time of this report, no such demand has been made. Upon the consummation of the merger on April 1, 2015, the Company assumed a promissory note with a remaining principal balance of $30,378 due to the former CEO of the Company. These amounts are non-interest bearing and are due on demand. The Company pays these loans as sufficient funds become available. At September 30, 2016, the loan had an outstanding balance of $7,670. Upon the consummation of the merger on April 1, 2015, the Company assumed an OID promissory note with a remaining principal and accrued interest balance of $10,593. During the third quarter of 2015, interest payments of $1,500 were paid. At November 30, 2015, the principal balance of the note was $10,000, and an accrued interest balance of $1,131 at a rate of 2.5% per month was restructured into a note due on or before December 15, 2016 for a total of $11,131 principal balance, accruing interest at .67% per month and monthly payments of $968 commencing January 15, 2016. At September, 2016, the outstanding note balance was $8,431. Upon the consummation of the merger on April 1, 2015, the Company assumed two promissory notes with a total principal balance of $8,783 due to the Companys CFO. During the second quarter of 2015, the CFO loaned the Company an additional $365 and the Company made payments to the CFO during the same period in the amount of $1,307. These advances do not incur any interest and will be paid by the Company when sufficient funds are available. On January 28, 2016, the CFO loaned the Company $30,000, accruing interest at .67% per month and is repayable by the Company when sufficient funds are available. At September, 2016, the outstanding loan balance was $31,973. On April 8, 2015, the Company received a $310,000 loan from a related party principal shareholder. The note accrues interest at the rate of 6% per annum and was repayable on or before October 31, 2015. There was accrued interest balance of $8,616 as of September 30, 2015. The Company and shareholder replaced the note with a promissory new note in the face amount of $320,166, which includes principal and accrued interest through October 31, 2015. Repayment has been fixed at eleven monthly payments of $27,750 plus one final payment of $27,006.63 (including interest of 6%) beginning on or before December 31, 2015. As of September 30, 2016, the Company is seven payments in arrears and the outstanding balance was $241,346. On July 19, 2016, the Company received a $60,000 loan less fees of $75 for a related party loan with proceeds of $59,925 from the Companys CEO. The promissory note carries an annual interest rate of 7.99% with a monthly installment payment of $1,052 through July 19, 2022. As of September 30, 2016, the outstanding balance was $58,610. On August 11, 2016, the Company received an $111,645 loan from a related party principal shareholder. The note accrues interest at the rate of 8% per annum and is repayable on or before February 11, 2017. As of September 30, 2016, the outstanding balance was $111,645. Notes Payable September 30, 2016 December 31, 2015 Payable To Principal Interest* Principal Interest* Shareholder $ 19,108 $ 19,108 Shareholder 125,000 .67% Vendor 30,000 52,500 Total $ 49,108 $ 196,608 * effective interest rate per month including default penalties Upon the consummation of the merger on April 1, 2015, the Company assumed a promissory note with a remaining principal balance of $19,108 due to an unrelated party investor and shareholder of the Company. The $19,108 is non-interest bearing and currently due, although the note holder has not made any demand for payment at this time. At the end of the reporting period, the holder, who is also a shareholder, authorized the Company to convert the outstanding amount and an equivalent amount of common stock received from a previous investment into the Series A Convertible Preferred shares described elsewhere in this report. Upon the consummation of the merger on April 1, 2015, the Company assumed a non-interest bearing OID promissory note due to an unrelated party stockholder, subject to a forbearance agreement and due July 14, 2015. A 25% penalty is due if the balance is not paid by the due date. Furthermore, 5% of all factor payments to the Company are to be used to pay down the note. The note is secured by certain of the Companys intellectual property. 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 September 21, 2015, the shareholder agreed to convert $81,250 of the $165,000 outstanding note to 506,421 shares of the Companys common stock and the addition of the 25% penalty as stated above in the amount of $41,250, with a new note balance of $125,000, 15-month term and 8% interest. The Company recorded a loss on conversion in the amount of $55,484. The note was repaid on April 1, 2016 including the accrued interest of $7,078. At September 30, 2016 and December 31, 2015, the accrued interest was zero and $4,578, respectively. On August 10, 2015, the Company entered into an agreement with FacilityTeam of Ontario, Canada to settle a dispute that had arisen concerning payments for software development services. The Company agreed to pay to FacilityTeam $2,500 per month starting October 1, 2015 for 24 months and, pursuant thereto, took a charge in the third quarter of 2015 for the settlement amount of $60,000. At September 30, 2016 and December 31, 2015, the outstanding balance was $30,000 and $52,500, respectively. Convertible Notes, Including Premiums September 30, 2016 December 31, 2015 Payable To Principal Premium Principal, Including Premium Principal Premium Principal, Including Premium Vendor $ 50,000 $ 50,000 $ 100,000 $ 50,000 $ 50,000 $ 100,000 Vendor 46,975 46,975 93,950 46,975 46,975 93,950 Total $ 96,975 $ 96,975 $ 193,950 $ 96,975 $ 96,975 $ 193,950 Upon the consummation of the merger on April 1, 2015, the Company assumed a convertible promissory note of $50,000 due to a vendor of the Company which included a premium of $50,000 relating to its treatment as stock settled debt under ASC 480. The $50,000 convertible note accrues interest at 1% per month and is convertible into the Companys common stock at a 50% discount to the average closing bid prices for the companys common stock for the five days immediately preceding the conversion date. An interest payment was made on January 11, 2016 in the amount of $3,230. The outstanding note balance at September 30, 2016 and December 31, 2015 was $50,000 and $50,000, respectively and accrued interest on September 30, 2016 and December 31, 2015 was $6,011 and $4,723, respectively. As previously disclosed, on May 23, 2016, the Company filed a lawsuit against, the holder of this note and another convertible note described below. The Company owes the principal and interest due under the notes and has sought to pay principal and interest of the note which first came due but its offer was rejected. As of the date of this report, the lawsuit remains unresolved. (see Notes 5 and 9) Upon the consummation of the merger on April 1, 2015, the Company assumed a promissory note with a remaining principal balance of $44,325 bearing interest at 1.5% per month. The note holder gave 30-day notice to the Company on May 1, 2015 for the note to be repaid in full plus any interest due. On June 30, 2015, an Addendum to Promissory Note was executed providing that the payment of $46,975, $44,325 plus accrued interest of $2,650, in connection with the Debt Purchase Agreement represents the total settlement of the Note. Also, on June 30, 2015 a current shareholder and services provider agreed to assume the new $46,975 note with the existing terms and conditions and an addendum was signed for the assumption and making the note convertible into the Companys common stock at a 50% discount to the average price of the Companys common stock for the five trading days preceding conversion and the new Note is non-interest bearing. The addendum was treated as a debt extinguishment. The Company recorded a premium of $46,975 since the note was convertible at a fixed rate to a fixed monetary amount equal to $93,950 pursuant to ASC 480. On September 30, 2016 and December 31, 2015, the outstanding balance on the note was $93,950 which includes the $46,975 premium and there was accrued interest on September 30, 2016 and December 31, 2015 of $10,568 and $4,228, respectively. During the previous quarter, the new holder attempted a conversion into stock of a portion of the note. The Company determined that the conversion notice was invalid in several respects and rejected the conversion. As previously disclosed, on May 23, 2016, the Company filed a lawsuit against, the holder of this note and another convertible note described above. The Company owes the principal and interest due under the notes and has sought to pay principal and interest of the note which first came due but its offer was rejected. As of the date of this report, the lawsuit remains unresolved. (see Notes 5 and 9). Note Payable Third Party September 30, 2016 December 31, 2015 Payable To Principal Interest Principal Interest Note payable $ 1,800,000 14% + 2% $ Less unamortized discounts 659,418 Note payable, net $ 1,140,582 $ On March 31, 2016, the Company entered into a Securities Purchase Agreement with an institutional investor, which, together with the transaction documents referenced therein, provides for the terms in the following paragraph. The Company closed the Offering on April 1, 2016. The offering amount was $1,800,000 less a 5% original issue discount. The note is a senior debt obligation secured by substantially all assets of the Company and shares of all current and future subsidiaries as well as being guaranteed by each subsidiary but is not convertible into the Companys stock. The senior secured note also contains certain default provisions and is subject to standard covenants such as restrictions on issuing new debt. In conjunction with the note, the Company issued a warrant exercisable for 2.5 million shares of common stock exercisable for five years at an exercise price of $0.35 per share. The warrants also contain certain anti-dilution provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization or similar transactions as well as a potential adjustment to the exercise price based on certain events. The relative fair value of the warrants of $466,031 was recorded as a debt discount and is being amortized to interest expense over the term of the debt. The note will mature three years from the closing date and will accrue interest at the rate of 14% per annum, payable monthly. The note will accrue additional interest at the rate of 2% per annum, compounding monthly, payable annually in arrears. The Company may choose to begin amortizing the principal at any time subject to prepayment premiums. Also, the Company agreed to an amended placement agents fee with respect to the placement of such loan which differed from the original terms agreed with the Placement Agent as that agreement had expired (see Note 5, Placement Agency Agreement). The amendment included (a) postponement of payment of the cash fee of $5,000 to 15 days of execution of the term sheet, (b) the closing fee was fixed to $137,000 (based on a $1.8 million debt funding) and three-year warrants for 200,000 shares at an exercise price of $0.40 per share and valued at their fair value of $43,272. Other closing expenses totaled $40,000 plus another $10,000 of legal fees previously paid. Total cash issue costs of $192,000, the original issue discount of $90,000, the warrant relative fair value of $466,031 and warrant fair value of $43,272 were recorded as debt discounts to be amortized over the three-year term of the debt. Net proceeds were $1,518,000 after all issue costs. Additionally, at closing, certain previously recorded obligations of the Company totaling $690,110, as discussed below, were paid directly from the lender reducing the actual proceeds to the Company. On April 1, 2016, in conjunction with the closing of the aforementioned Securities Purchase Agreement, the sum of $558,032 was remitted out of the proceeds in final settlement of the litigation with CW Electric. This amount consisted of $550,000 of the agreed settlement plus $8,032 of accrued interest. This represents full and final settlement of this matter, which is now closed. On April 1, 2016, the Company directed the sum of $132,078 to be paid out of proceeds of the Securities Purchase agreement to a shareholder who held a note secured against part of the Companys assets. The payment of $125,000 in principal and $7,078 of accrued interest represents full payment of the note and the noteholder no longer holds any security against the assets. On April 1, 2016, the Company made a payment of $142,000 (part of the $182,000 discussed above) to a placement agent as compensation for arrangement of financing through the aforementioned Securities Purchase Agreement. The payment was deducted from proceeds of that agreement. The Company issued 200,000 three-year warrants with an exercise price of $0.40 to the agent as additional compensation. These amounts are broadly in line with the anticipated compensation agreed within the original placement agency agreement which was terminated in December, 2015. |
NOTE 4 - LINE OF CREDIT
NOTE 4 - LINE OF CREDIT | 9 Months Ended |
Sep. 30, 2016 | |
NOTE 4 - LINE OF CREDIT [Abstract] | |
NOTE 4 - LINE OF CREDIT | NOTE 4 LINE OF CREDIT The Company assumed a line of credit with Wells Fargo Bank upon the closing of the merger on April 1, 2015. The line of credit provided for borrowings up to $40,000, but is now closed to future borrowing. The outstanding balance under the facility as of September 30, 2016 and December 31, 2015 was $38,827 and $40,216, respectively, including accrued interest. This line of credit has no maturity date. The annual interest rate is 10%. The former CEO of the Company personally guaranteed the repayment of the outstanding amount. |
NOTE 5 - COMMITMENTS AND CONTIN
NOTE 5 - COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 5 - COMMITMENTS AND CONTINGENCIES | NOTE 5 COMMITMENTS AND CONTINGENCIES Placement Agency Agreement On July 1, 2015, duostech entered into a limited exclusive placement agent agreement in connection with the proposed offer and placement of up to $5,000,000 of securities, convertible instruments, private notes or loans (excluding a registered public offering) of the Company. The Agreement was for an initial term of 120 days. duostech paid an initial fee of $15,000 in connection with this engagement with an additional $5,000 due upon the acceptance by duostech of a valid term sheet. In the event of a transaction being concluded, the agent would have been paid 5% of senior debt that is not convertible and 8% cash plus 8% warrants of any equity based transaction. At the conclusion of the initial term no acceptable term sheet had been presented and the Company terminated the agreement on December 1, 2015. The parties agreed to continue working together without a formal agreement but with an understanding that should a term sheet be accepted and a subsequent financing be secured, Duos would honor the terms of the original agreement as described above. On January 6, 2016, the Company entered into an agreement with an investment banker to provide general financial advisory and investment banking services. Services included, but not limited to in the agreement are to provide a valuation analysis of the Company, assist management and advise the Company with respect to its strategic planning process and business plans including an analysis of markets, positioning, financial models, organizational structure, potential strategic alliances, capital requirements, potential national listing and working closely with the Companys management team to develop a set of long and short-term goals with special focus on enhancing corporate and shareholder value. The Agreement is for an initial term of six months. The Company shall pay a non-refundable fee accruing at the rate of $10,000 per month, for the term of the agreement. These advisory fee payments will be accrued and deferred for payment until the earlier of 1) closing of a financing described in the agreement, 2) a closing of interim funding at which point fifty percent (50%) of the outstanding monthly advisory fee will be payable on the last day of the month following closing of the interim financing or 3) the termination of the agreement. The Company issued to the investment banker 912,000 vested shares of the Companys common stock as of the execution date of this agreement. In addition, the Company issued warrants for the purchase of 302,000 shares of the Companys common stock. The warrants shall have a 5-year term and an exercise price of $0.30. (See Note 7) On January 27, 2016, the Company entered into an agreement with a consultant to provide advisory services for an initial period of six months. The consultant will assist the Company with its objective of evaluating financing and other strategic options in connection with operational expansion and respond to any opportunities that arise in regard to strategic partnerships/acquisition/joint ventures or other business relationships that may advance revenue growth and enterprise value. Upon a qualified financing of at least $1,500,000 through a party introduced by the consultant, the Company agreed to issue up to $90,000 in equity or cash at the same rate and terms as the basis of the financing. In consideration for development services thirty days from the execution of this agreement, 20,000 shares of restricted common stock of the Company will be granted to the consultant or assigns and be issued within fifteen days of the grant. Also, 30,000 additional shares shall be granted to the consultant or assigns on completion of any transactions with a potential participant. In consideration for advisory services, the non-refundable sum of $5,000 was payable upon execution of the agreement with a further $5,000 to be deferred and paid upon the completion of any transaction with a potential participant. On May 5, 2016, the Company cancelled the agreement due to lack of performance with the consultant who was to provide advisory services for an initial period of six months. The Company paid an initial amount of $2,500 and no further compensation will be paid. No shares of common stock were issued in connection with this agreement. On May 13, 2016, the Company entered into an agreement with a consultant in the business of providing services for management consulting, business advisory, shareholder information and public relations for a period of three months. During the Term of this Agreement, the Company will pay to the Consultant the sum of $3,000 per month. The Company may accrue monthly fees without payment to the consultant until the company closes a qualified financing other than the first months retainer. Upon signing, the Company issued to the Consultant 125,000 shares of the Companys restricted common stock for a total purchase price of $100 and recorded $27,400 as a prepaid asset to be amortized over the three-month term. The Company amortized $27,400 to expense as of September 30, 2016. As of August 14, 2016, the agreement had expired and was not renewed in writing by the parties as called for in the agreement. The Company continues to work with the Principal on certain potential funding arrangements that were started (but not consummated) during the period in which the contract was in effect. On September 1, 2016, the Company entered into an agreement with a registered investment broker, for the purposes of securing interim and long-term funding for the Company. During the ninety-day term of this agreement, the Company will pay to the broker the sum of $50,000, certain travel expenses, plus 7% cash fee of the aggregate principle amount raised on a qualified financing. The Company has paid an initial amount of $6,500 to the broker and the broker has sent materials to qualified investors. As of the date of this report, the Company had not received any term sheets. Litigation On or about December 22, 2014, Corky Wells Electric (CW Electric) filed suit in the Circuit Court of Boyd County, Kentucky, against duostech demanding relief related to a promissory note issued by duostech to CW Electric on December 10, 2008 in the amount of $741,329. The suit was subsequently removed to the United States District Court for the Eastern District of Kentucky, Ashland Division. Previously, duostech entered into a Stipulation for Settlement on September 30, 2009 wherein CW Electric agreed to dismiss a previous lawsuit and duostech agreed to resume payments on the promissory note. In its suit, CW Electric contended that duostech breached the terms of that Stipulation for Settlement by not making the required number of payments at the times stipulated therein. CW Electric further contended that due to the breach of payment terms, under the terms of the promissory note, the outstanding amount continued to accrue interest at the rate of 18% per annum, which compounded monthly for a total of $1,411,650 due through the future final payment date. Effective October 28, 2015, duostech and CW Electric entered into a Settlement and Release Agreement (the Settlement Agreement) pursuant to which the parties have agreed to settle the suit upon the payment by duostech to CW Electric of $550,000 (the Settlement Amount) by February 15, 2016. An agreed judgment, evidencing the Companys agreement to pay the Settlement Amount, was signed by the parties (the Agreed Judgment) and such document deposited into escrow with CW Electrics counsel. At the time of the payment of the Settlement Amount, the Agreed Judgment is to be returned to the Company for destruction. Under the terms of the Settlement Agreement, duostech had until February 15, 2016 to pay the Settlement Amount and, if such amount was not paid by such date, then the Agreed Judgment was to be filed with the court and executed upon, with interest due at 12% per annum beginning February 15, 2016. On February 9, 2016, duostechs counsel informed CW Electrics counsel that on February 5, 2016, Duos executed a term sheet with an investment fund which will, among other things, provide the funding for the settlement with C.W. Electric. At the time, Duos and the lender believed that the closing would take place during or prior to the second week in March. Consequently, Duos requested that C.W. Electric refrain from filing and/or executing on the Agreed Judgment attached to the Settlement Agreement until after the closing, as they were in the final stretches of obtaining the funding necessary to resolve this matter. CW Electrics counsel agreed to an extension and following the filing of a respective joint motion, the District Court for the Eastern District of Kentucky entered an order of continuance until March 20, 2016 and further extended until April 20, 2016. Payment was made in full upon the closing of the loan dated April 1, 2016. A contingent lawsuit payable of $550,000 was reflected at March 31, 2016 and December 31, 2015 in the Companys consolidated financial statements. On April 1, 2016, CW has released the Company, duostech and affiliates from any action that could have been brought in the suit. On April 27, 2016, the holder of two convertible notes issued a notice of conversion to the Company for a portion of one of the notes. The conversion notice was determined to be invalid as was a previous conversion notice issued on the other note during the quarter. A difference of opinion has arisen between the holder and the Company as to the mechanics of conversion and the Company had been in discussions to resolve those differences. On May 23, 2016, we filed a lawsuit against the holder. The suit alleges, amongst other things, that the officers and directors of Greentree that entered into the notes, failed to disclose legal facts with respect to their personal conduct in the past, which, had the Company known, would have made it unlikely that such transaction would have been consummated. The Company owes the principal and interest due under the notes and sought to pay principal and interest of the note which first came due, but the offer was rejected. On May 24, 2016, the Company learned through a third party that the holder had filed suit against the Company on May 12, 2016 for default on one of notes, but had not notified the Company or its attorneys, nor served either the Company or its attorneys. The Company was served shortly thereafter. (See Note 9) Delinquent Payroll Taxes Payable As reported previously, the Company has a delinquent payroll tax payable at September 30, 2016 and December 31, 2015 in the amount of $94,470 and $244,470, respectively. The delinquent portion is included in the payroll taxes payable balance of $408,186 and $296,215, respectively, as shown on the Companys consolidated balance sheet. The IRS has accepted the Companys offer of a monthly installment agreement in the amount of $25,000 commencing March 28, 2016. The monthly installment payments paid as of September 30, 2016 totals $150,000. (See Note 9) |
NOTE 6 - RELATED PARTIES
NOTE 6 - RELATED PARTIES | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
NOTE 6 - RELATED PARTIES | NOTE 6 RELATED PARTIES Notes, Loans and Accounts Payable As of September 30, 2016 and December 31, 2015, there were various notes and loans payable to related parties totaling $611,352 and $486,964, respectively, with related unpaid interest of $67,563 and $50,873 respectively (see Note 3). The Company also has accounts payable-related parties due to officers for expense reimbursement and due to an affiliate for services in the total amount of $36,400 and $30,070 at September 30, 2016 and December 31, 2015, respectively. Administrative Services Agreement On December 1, 2002, the Company and the former parent entered into an Administrative Services Agreement whereby the former parent agreed to provide administrative and support services including but not limited to, (a) rent and general infrastructure, (b) human resource management services, and (c) accounting and financial services and other miscellaneous services. The monthly fee was subject to adjustments in accordance with the actual services rendered. There were no fees incurred with the former parent for the year ending December 31, 2015 and we will not incur any additional fees going forward. At September 30, 2016 and December 31, 2015, $11,788 and $5,173, respectively, was due to the former parent under this agreement and is included in Accounts payable - related parties as disclosed above. |
NOTE 7 - STOCKHOLDERS' DEFICIT
NOTE 7 - STOCKHOLDERS' DEFICIT | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
NOTE 7 - STOCKHOLDERS' DEFICIT | NOTE 7 STOCKHOLDERS DEFICIT Common stock issued for services and settlements On January 6, 2016, the Company entered into an agreement with an investment banker to provide general financial advisory and investment banking services. Services included, but not limited to in the agreement are to provide a valuation analysis of the Company, assist management and advise the Company with respect to its strategic planning process and business plans including an analysis of markets, positioning, financial models, organizational structure, potential strategic alliances, capital requirements, potential national listing and working closely with the Companys management team to develop a set of long and short-term goals with special focus on enhancing corporate and shareholder value. The Agreement is for an initial term of six months. The Company shall pay a non-refundable fee accruing at the rate of $10,000 per month, for the term of the agreement. These advisory fee payments will be accrued and deferred for payment until the earlier of 1) closing of the financing described in the agreement, 2) a closing of interim funding at which point fifty percent (50%) of the outstanding monthly advisory fee will be payable on the last day of the month following closing of the interim financing or 3) the termination of the agreement. The Company has issued to the investment banker 912,000 vested shares of the Companys common stock as of the execution date of this agreement. In addition, the Company has issued warrants for the purchase of 302,000 shares of the Companys common stock. The warrants have a 5-year term and an exercise price of $0.30. As of September 30, 2016, the Company has accrued $60,000 which is unpaid and is recorded in accrued expenses on the Companys consolidated balance sheet. On January 22, 2016, Warrant Holders were granted 2,100 shares of common stock in exchange for existing 5,250 warrants resulting in a loss on settlement of $630 charged to operations. On April 1, 2016, the Company issued a warrant exercisable into 2.5 million shares with a term of five years and exercise price of $0.35 per share in conjunction with a Securities Purchase Agreement (see Note 3). The Warrants also contain certain anti-dilution provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization or similar transactions as well as a potential adjustment to the exercise price based on certain events. The relative fair value of the warrants of $466,031 was recorded as a debt discount and will be amortized to interest expense over the term of the debt. On April 1, 2016, the Company issued 200,000 three-year warrants with an exercise price of $0.40 to the placement agent as additional compensation for arrangement of financing through the Securities Purchase Agreement (see Note 3). The fair value of the warrants of $43,272 was recorded as a discount and will be amortized to interest expense over the term of the debt. The Company issued 253,977 shares of common stock for consulting services rendered valued at the quoted trading price on the respective grant date resulting in consulting expense of $35,000 in the nine months ended September 30, 2016. In May 2016, the Company issued 125,000 shares of common stock for consulting services valued at the quoted trading price on the respective grant date resulting in prepaid consulting expense of $27,400 to be amortized over the three-month agreement term. In August 2016, the Companys Board of Directors approved a new class of Preferred Stock, Series A. The Articles of Amendment Designating Preferences, Rights and Limitations of the Series A were filed with State on October 31, 2016. The Series A authorized 500,000 of the Companys 10 million blank check preferred stock with a stated value of $10 per share, an 8% cumulative dividend payable when and if declared by the Board and a provision to convert into the Companys common stock at $0.18 per share. If the holder elects to convert the Series A to common stock, the cumulative dividend amount will also be converted to common stock. The Series A is redeemable by the holder after 3 years including all unconverted stated value and accrued dividends. For shareholders who invested in previous private placements, the Company is offering on a case by case basis, the ability to convert the existing amount invested into an equivalent amount in the Series A on the condition that they invest an equivalent additional amount in the Series A. As of September 30, 2016, several of the companys shareholders had expressed interest in participating and the Company has received prepayments in the amount of $140,000 which have been recorded as accrued expenses, a current liability, as of September 30, 2016. (See Note 9) |
NOTE 8 - COMMON STOCK PURCHASE
NOTE 8 - COMMON STOCK PURCHASE WARRANTS | 9 Months Ended |
Sep. 30, 2016 | |
Other Liabilities Disclosure [Abstract] | |
NOTE 8 - COMMON STOCK PURCHASE WARRANTS | NOTE 8 COMMON STOCK PURCHASE WARRANTS Warrants The following is a summary of activity for warrants to purchase common stock for the nine months ended September 30, 2016: September 30, 2016 Number of Warrants Weighted Avg. Exercise Price Remaining Contractual Life (Years) Outstanding at the beginning of the year 609,340 $ .54 4.25 Warrants expired (5,250 ) 6.67 Warrants issued with debt or debt modifications 3,002,000 .35 4.35 Warrants exchanged for common stock (5,250 ) 6.67 Outstanding at end of period 3,600,840 .36 4.25 Exercisable at end of period 3,600,840 $ .36 4.25 In the first quarter of 2016, 5,250 warrants were exchanged for 2,100 common shares resulting in a loss on exchange of $630 charged to operations. During the same period, 1,500 warrants expired. The Company has issued warrants for the purchase of 302,000 shares of the Companys common stock, which the warrants have a 5-year term and an exercise price of $0.30. (See Note 5) During the second quarter of 2016, 2,700,000 warrants were issued with the Securities Purchase Agreement and the amended Placement Agent Agreement. During the same period, 3,750 warrants expired. |
NOTE 9 - SUBSEQUENT EVENTS
NOTE 9 - SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
NOTE 9 - SUBSEQUENT EVENTS | NOTE 9 SUBSEQUENT EVENTS On October 11, 2016, the Company received an $8,000 prepayment from a shareholder to invest into Series A Convertible Preferred Shares pending filing of the Articles of Amendment with the state of Florida. This is in addition to $140,000 received during the reporting period for a total of $148,000. In accordance with the articles, the Company will repurchase an equivalent dollar amount of shares from the investor such that the aggregate proceeds from the Series A will be $296,000 or 29,600 Preferred Shares as discussed in Note 7. The Company will record Temporary Equity in the amount of $296,000 as the transactions are finalized. The Common Stock repurchased will be held on the Companys balance sheet. As of October 28, 2016, the Company was current with the $25,000 monthly installment plan with the IRS. (See Note 5) On October 31, 2016, the Company filed Articles of Amendment Designating Preferences, Rights and Limitations of Series A Convertible Preferred Stock with the state of Florida. (See Note 2) On November 4, 2016, the Company was notified by its attorneys that motions were granted against the Company in a legal matter previously disclosed concerning Greentree Financial. The motions were without prejudice and the Company intends to amend both our affirmative defenses and counterclaim to set forth additional information which we intend to submit to the court by November 21, |
NOTE 1 - NATURE OF OPERATIONS15
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations Duos Technologies Group, Inc. (Company), through its operating subsidiary Duos Technologies, Inc. (duostech) is primarily engaged in the design and deployment of state-of-the-art, artificial intelligence driven intelligent technologies systems. duostech converges traditional security measures with information technologies to create actionable intelligence. duostechs IP is built upon two of its core technology platforms (praes i ® t i ® t The Companys strategy includes expansion of its technology base through organic development efforts, strategic partnerships, and growth through strategic acquisitions. duostechs primary target industry sectors include transportation, with emphasis on freight and transit railroad owners/operators, petro-chemical, utilities and healthcare. As reported previously, Duos Technologies Group, Inc. is the result of the reverse merger between duostech and a wholly owned subsidiary of Information Systems Associates, Inc., a Florida corporation (ISA), which became effective as of April 1, 2015 and as a result of which duostech became a wholly owned subsidiary of the merged entity. The merger was followed by a corporate name change to Duos Technologies Group, Inc., a symbol change from IOSA to DUOT and up-listing from OTC Pink to OTCQB. ISAs original business of IT Asset Management (ITAM) services for large data centers is now operated as a division of the Company that continues its sales efforts through large strategic partners. ISA developed a methodology for the efficient data collection of assets contained within large data centers and was awarded a patent in 2010 for specific methods to collect and audit data. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (all of which are of a normal recurring nature) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2016 are not indicative of the results that may be expected for the year ending December 31, 2016 or for any other future period. These unaudited consolidated financial statements and the unaudited condensed notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission (the SEC) on April 1, 2016. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, duostech and TrueVue 360, Inc. All 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. The most significant estimates in the accompanying consolidated financial statements include the allowance on accounts receivable, valuation of deferred tax assets, valuation of assets acquired and liabilities assumed in business combinations, estimates of percentage completion on projects and related revenues, valuation of stock-based compensation, valuation of warrants issued with debt, valuation of beneficial conversion features in convertible debt, valuation of stock-based awards and valuation of loss contingencies. 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. |
Concentrations | Concentrations Cash Concentrations Cash is 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 September 30, 2016 and December 31, 2015. Significant Customers and Concentration of Credit Risk The Company, by policy, routinely assesses the financial strength of its customers. As a result, the Company believes that its accounts receivable credit risk exposure is limited and has not experienced any write-downs in its accounts receivable balances through September 30, 2016. 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 for the nine months ended September 30, 2016 and 2015, and total accounts receivable at September 30, 2016 and December 31, 2015, respectively: 2016 2015 Revenue Accounts Receivable Revenue Accounts Receivable Customer A 31 % Customer A Customer A 22 % Customer A 27 % Customer B 20 % Customer B 57 % Customer B 14 % Customer B Customer C 16 % Customer C 14 % Customer C Customer C Customer D 16 % Customer D Customer D Customer D Customer E 11 % Customer E 11 % Customer E Customer E Customer F Customer F Customer F Customer F 33 % Customer G Customer G Customer G 21 % Customer G Customer H Customer H Customer H 20 % Customer H Customer I Customer I Customer I Customer I 24 % Geographic Concentration Approximately 18% of revenue is generated from customers outside of the United States. |
Fair Value 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, 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. The estimated fair value of certain financial instruments, including accounts receivable and accounts payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The cost basis of notes and convertible debentures approximates fair value due to the market interest rates carried for these instruments. |
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. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options, stock warrants, convertible debt instruments or other common stock equivalents. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. At September 30, 2016, outstanding warrants to purchase an aggregate of 3,600,840 shares of common stock and 1,819,418 shares of common stock issuable upon conversion of convertible debt (principal and interest) were excluded from the computation of dilutive earnings per share because the inclusion would have been anti-dilutive. |
Segment Information | Segment Information The Company operates in one reportable segment. |
Reclassifications | Reclassifications Certain note amounts in the 2015 consolidated balance sheet have been reclassified within current liabilities to conform to the 2016 presentation. |
Recent Issued Accounting Standards | Recent Issued Accounting Standards In August 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-14 Revenue from Contracts with Customers. The ASU defers the effective date of previously issued ASU 2014-09 (the new revenue recognition standard) by one year for both public and private companies. The ASU requires public entities to apply the new revenue recognition guidance for annual reporting periods beginning after December 15, 2017, and interim reporting periods within annual reporting periods beginning after December 15, 2017. Both public and nonpublic entities will be permitted to apply the new revenue recognition standard as of the original effective date for public entities (annual periods beginning after December 15, 2016). The Company plans to adopt this standard for their fiscal year beginning January 1, 2018. The Company is in the process of analyzing the impacts of this ASU, but does not believe it will have a material impact on its consolidated financial statements. In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. 2016-02: Leases (Topic 842) In March 2016, the FASB issued Accounting Standards Update No. 2016-09: "Compensation Stock Compensation (Topic 718) - I |
NOTE 1 - NATURE OF OPERATIONS16
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Concentration | 2016 2015 Revenue Accounts Receivable Revenue Accounts Receivable Customer A 31 % Customer A Customer A 22 % Customer A 27 % Customer B 20 % Customer B 57 % Customer B 14 % Customer B Customer C 16 % Customer C 14 % Customer C Customer C Customer D 16 % Customer D Customer D Customer D Customer E 11 % Customer E 11 % Customer E Customer E Customer F Customer F Customer F Customer F 33 % Customer G Customer G Customer G 21 % Customer G Customer H Customer H Customer H 20 % Customer H Customer I Customer I Customer I Customer I 24 % |
NOTE 3 - DEBT (Tables)
NOTE 3 - DEBT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable - Financing Agreements | September 30, 2016 December 31, 2015 Payable To Principal Interest Principal Interest Third Party - Insurance Note 1 $ 2,211 9.75 % $ 21,325 9.75 % Third Party - Insurance Note 2 19,065 10.00 % 11,277 9.75 % Third Party - Insurance Note 3 37,943 8.05 % Third Party - Insurance Note 4 28,253 9.24 % 11,422 8.99 % Total $ 87,472 $ 44,024 |
Notes Payable - Related Parties | September 30, 2016 December 31, 2015 Payable To Principal Interest* Principal Interest* Related party $ 65,000 .75 % $ 65,000 .75 % Related party 13,369 .67 % 17,651 .67 % Related party 16,808 33,615 Related party 56,500 .67 % 36,500 .67 % Related party 7,670 21,170 Related party 8,431 .67 % 11,131 .67 % CFO 31,973 .67 % 7,841 Related party 241,346 .50 % 294,056 .50 % CEO 58,610 .67 % Related party 111,645 .67 % Total $ 611,352 $ 486,964 * effective interest rate per month including default penalties |
Notes Payable | September 30, 2016 December 31, 2015 Payable To Principal Interest* Principal Interest* Shareholder $ 19,108 $ 19,108 Shareholder 125,000 .67% Vendor 30,000 52,500 Total $ 49,108 $ 196,608 * effective interest rate per month including default penalties |
Convertible Notes Payable-Net of Discounts, Including Premiums | September 30, 2016 December 31, 2015 Payable To Principal Premium Principal, Including Premium Principal Premium Principal, Including Premium Vendor $ 50,000 $ 50,000 $ 100,000 $ 50,000 $ 50,000 $ 100,000 Vendor 46,975 46,975 93,950 46,975 46,975 93,950 Total $ 96,975 $ 96,975 $ 193,950 $ 96,975 $ 96,975 $ 193,950 |
Notes Payable - Third Party | September 30, 2016 December 31, 2015 Payable To Principal Interest Principal Interest Note payable $ 1,800,000 14% + 2% $ Less unamortized discounts 659,418 Note payable, net $ 1,140,582 $ |
NOTE 8 - COMMON STOCK PURCHAS18
NOTE 8 - COMMON STOCK PURCHASE WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Warrants | September 30, 2016 Number of Warrants Weighted Avg. Exercise Price Remaining Contractual Life (Years) Outstanding at the beginning of the year 609,340 $ .54 4.5 Warrants expired (5,250 ) 6.67 Warrants issued with debt or debt modifications 3,002,000 .35 4.6 Warrants exchanged for common stock (5,250 ) 6.67 Outstanding at end of period 3,600,840 .36 4.5 Exercisable at end of period 3,600,840 $ .36 4.5 |
NOTE 1 - NATURE OF OPERATIONS19
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Credit Risk) (Details) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue [Member] | Outside of the US [Member] | ||
Concentration of Credit Risk | 18.00% | |
Customer A [Member] | Revenue [Member] | ||
Concentration of Credit Risk | 31.00% | 22.00% |
Customer A [Member] | Accounts Receivable | ||
Concentration of Credit Risk | 27.00% | |
Customer B [Member] | Revenue [Member] | ||
Concentration of Credit Risk | 20.00% | 14.00% |
Customer B [Member] | Accounts Receivable | ||
Concentration of Credit Risk | 57.00% | |
Customer C [Member] | Revenue [Member] | ||
Concentration of Credit Risk | 16.00% | |
Customer C [Member] | Accounts Receivable | ||
Concentration of Credit Risk | 14.00% | |
Customer D [Member] | Revenue [Member] | ||
Concentration of Credit Risk | 16.00% | |
Customer D [Member] | Accounts Receivable | ||
Concentration of Credit Risk | ||
Customer E [Member] | Revenue [Member] | ||
Concentration of Credit Risk | 11.00% | |
Customer E [Member] | Accounts Receivable | ||
Concentration of Credit Risk | 11.00% | |
Customer F [Member] | Revenue [Member] | ||
Concentration of Credit Risk | ||
Customer F [Member] | Accounts Receivable | ||
Concentration of Credit Risk | 33.00% | |
Customer G [Member] | Revenue [Member] | ||
Concentration of Credit Risk | 21.00% | |
Customer G [Member] | Accounts Receivable | ||
Concentration of Credit Risk | ||
Customer H [Member] | Revenue [Member] | ||
Concentration of Credit Risk | 20.00% | |
Customer H [Member] | Accounts Receivable | ||
Concentration of Credit Risk | ||
Customer I [Member] | Revenue [Member] | ||
Concentration of Credit Risk | ||
Customer I [Member] | Accounts Receivable | ||
Concentration of Credit Risk | 24.00% |
NOTE 1 - NATURE OF OPERATIONS20
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | Sep. 30, 2016shares |
Note 1 - Nature Of Operations Basis Of Presentation And Summary Of Signifcant Acctg Policies Details Narratives | |
Number of Warrants Outstanding | 3,600,840 |
Number of Shares upon Conversion | 1,819,418 |
NOTE 2 - GOING CONCERN (Narrati
NOTE 2 - GOING CONCERN (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Net loss | $ 591,074 | $ 209,324 | $ 2,092,558 | $ 3,014,069 | |
Net cash used in operations | 1,518,348 | $ 2,003,239 | |||
Working capital deficit | 3,901,399 | 3,901,399 | |||
Stockholders' Deficit | 4,915,212 | 4,915,212 | $ 3,758,723 | ||
Accumulated deficit | 23,043,734 | 23,043,734 | $ 20,951,176 | ||
Direct payments from lender | 837,891 | ||||
Long-term debt financing | $ 1,800,000 | $ 1,800,000 | |||
Preferred stock shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||
Preferred stock shares par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Series A Preferred Stock [Member] | |||||
Preferred stock shares authorized | 500,000 | 500,000 | |||
Preferred stock shares par value | $ 10 | $ 10 | |||
Percentage of accrued dividend | 8.00% | ||||
Conversion of stock price per share of common stock | $ 0.18 | $ 0.18 | |||
Redemption period of dividends | 3 years |
NOTE 3 - DEBT (Schedule of Note
NOTE 3 - DEBT (Schedule of Notes Payable - Financing Agreements) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Notes Payable, Principal | $ 87,472 | $ 44,024 |
Third Party - Insurance Note 1 [Member] | ||
Notes Payable, Principal | $ 2,211 | $ 21,325 |
Notes Payable, Interest | 9.75% | 9.75% |
Third Party - Insurance Note 2 [Member] | ||
Notes Payable, Principal | $ 19,065 | $ 11,277 |
Notes Payable, Interest | 10.00% | 9.75% |
Third Party - Insurance Note 3 [Member] | ||
Notes Payable, Principal | $ 37,943 | |
Notes Payable, Interest | 8.05% | |
Third Party - Insurance Note 4 [Member] | ||
Notes Payable, Principal | $ 28,253 | $ 11,422 |
Notes Payable, Interest | 9.24% | 8.99% |
NOTE 3 - DEBT (Schedule of No23
NOTE 3 - DEBT (Schedule of Notes Payable - Related Parties) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | |
Notes Payable - Related Parties, Principal Amount | $ 611,352 | $ 486,964 | |
CFO [Member] | |||
Notes Payable - Related Parties, Principal Amount | $ 31,973 | $ 7,841 | |
Notes Payable - Related Parties, Interest Rate | [1] | 0.67% | |
CEO [Member] | |||
Notes Payable - Related Parties, Principal Amount | $ 58,610 | ||
Notes Payable - Related Parties, Interest Rate | [1] | 0.67% | |
Related Party [Member] | |||
Notes Payable - Related Parties, Principal Amount | $ 65,000 | $ 65,000 | |
Notes Payable - Related Parties, Interest Rate | [1] | 0.75% | 0.75% |
Related Party [Member] | |||
Notes Payable - Related Parties, Principal Amount | $ 13,369 | $ 17,651 | |
Notes Payable - Related Parties, Interest Rate | [1] | 0.67% | 0.67% |
Related Party [Member] | |||
Notes Payable - Related Parties, Principal Amount | $ 16,808 | $ 33,615 | |
Notes Payable - Related Parties, Interest Rate | [1] | ||
Related Party [Member] | |||
Notes Payable - Related Parties, Principal Amount | $ 56,500 | $ 36,500 | |
Notes Payable - Related Parties, Interest Rate | [1] | 0.67% | 0.67% |
Related Party [Member] | |||
Notes Payable - Related Parties, Principal Amount | $ 7,610 | $ 21,170 | |
Notes Payable - Related Parties, Interest Rate | [1] | ||
Related Party [Member] | |||
Notes Payable - Related Parties, Principal Amount | $ 8,431 | $ 11,131 | |
Notes Payable - Related Parties, Interest Rate | [1] | 0.67% | 0.67% |
Related Party [Member] | |||
Notes Payable - Related Parties, Principal Amount | $ 241,346 | $ 294,056 | |
Notes Payable - Related Parties, Interest Rate | [1] | 0.50% | 0.50% |
Related Party [Member] | |||
Notes Payable - Related Parties, Principal Amount | $ 111,645 | ||
Notes Payable - Related Parties, Interest Rate | [1] | 0.67% | |
[1] | effective interest rate per month including default penalties |
NOTE 3 - DEBT (Schedule of No24
NOTE 3 - DEBT (Schedule of Notes Payable - Net of Discounts) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | |
Notes Payable-Net of Discounts, Principal Amount | $ 49,108 | $ 196,608 | |
Shareholder [Member] | |||
Notes Payable-Net of Discounts, Principal Amount | $ 19,108 | $ 19,108 | |
Notes Payable-Net of Discounts, Interest | [1] | ||
Shareholder [Member] | |||
Notes Payable-Net of Discounts, Principal Amount | $ 125,000 | ||
Notes Payable-Net of Discounts, Interest | [1] | 0.67% | |
Vendor [Member] | |||
Notes Payable-Net of Discounts, Principal Amount | $ 30,000 | $ 52,500 | |
Notes Payable-Net of Discounts, Interest | [1] | ||
[1] | effective interest rate per month including default penalties |
NOTE 3 - DEBT (Schedule of Conv
NOTE 3 - DEBT (Schedule of Convertible Notes Payable) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Convertible Notes Payable, Principal Amount | $ 96,975 | $ 96,975 |
Convertible Notes Payable, Premium | 96,975 | 96,975 |
Principal, Including Premium | 193,950 | 193,950 |
Vendor [Member] | ||
Convertible Notes Payable, Principal Amount | 50,000 | 50,000 |
Convertible Notes Payable, Premium | 50,000 | 50,000 |
Principal, Including Premium | 100,000 | 100,000 |
Vendor [Member] | ||
Convertible Notes Payable, Principal Amount | 46,975 | 46,975 |
Convertible Notes Payable, Premium | 46,975 | 46,975 |
Principal, Including Premium | $ 93,950 | $ 93,950 |
NOTE 3 - DEBT (Schedule of No26
NOTE 3 - DEBT (Schedule of Notes Payable - Third Party) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Notes Payable - Third Party | $ 1,800,000 | |
Less unamortized discounts | 659,418 | |
Note payable, net | 1,140,582 | |
Third Party [Member] | ||
Notes Payable - Third Party | $ 1,800,000 | |
Interest | 14.00% | |
Interest above stated rate | 2.00% |
NOTE 3 - DEBT (Narrative) (Deta
NOTE 3 - DEBT (Narrative) (Details) - USD ($) | Feb. 01, 2017 | Dec. 03, 2016 | Aug. 11, 2016 | Jul. 15, 2016 | Apr. 02, 2016 | Jan. 11, 2016 | Aug. 10, 2015 | Apr. 08, 2015 | Mar. 03, 2015 | Dec. 12, 2013 | Jul. 19, 2016 | Mar. 31, 2016 | Jan. 28, 2016 | Jan. 24, 2016 | Nov. 30, 2015 | Sep. 30, 2015 | Apr. 30, 2015 | Jan. 29, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Mar. 30, 2016 | Feb. 03, 2016 | Dec. 31, 2015 | Dec. 23, 2015 | Sep. 15, 2015 | Apr. 02, 2015 | May 28, 2008 |
Monthly installments of principal and interest | $ 150,000 | ||||||||||||||||||||||||||||||
Interest payment | $ 3,230 | 125,687 | $ 33,211 | ||||||||||||||||||||||||||||
Debenture issued | $ 198,089 | ||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.30 | ||||||||||||||||||||||||||||||
Warrants issued to placement agent | 3,600,840 | ||||||||||||||||||||||||||||||
Original issue discount | $ 659,418 | ||||||||||||||||||||||||||||||
Total amount due to shareholder | $ 36,400 | 30,070 | |||||||||||||||||||||||||||||
Strike price | $ 0.30 | ||||||||||||||||||||||||||||||
Third Party - Insurance Note 4 [Member] | |||||||||||||||||||||||||||||||
Interest rate | 9.24% | ||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 28,253 | 11,422 | $ 65,000 | ||||||||||||||||||||||||||||
Third Party - Insurance Note 4 [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 5,782 | ||||||||||||||||||||||||||||||
Third Party - Insurance Note 5 [Member] | |||||||||||||||||||||||||||||||
Notes payable outstanding balance | 11,422 | ||||||||||||||||||||||||||||||
Third Party - Insurance Note 3 [Member] | |||||||||||||||||||||||||||||||
Interest rate | 8.05% | ||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 37,943 | $ 123,571 | |||||||||||||||||||||||||||||
Third Party - Insurance Note 3 [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 12,818 | ||||||||||||||||||||||||||||||
Third Party - Insurance Note 2 [Member] | |||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 1,678 | ||||||||||||||||||||||||||||||
Interest rate | 10.00% | 9.75% | |||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 19,065 | 11,277 | $ 18,823 | ||||||||||||||||||||||||||||
Third Party - Insurance Note 2 [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 1,702 | ||||||||||||||||||||||||||||||
Third Party - Insurance Note 1 [Member] | |||||||||||||||||||||||||||||||
Interest rate | 9.75% | ||||||||||||||||||||||||||||||
Notes payable outstanding balance | 2,211 | 21,325 | $ 21,325 | ||||||||||||||||||||||||||||
CFO [Member] | |||||||||||||||||||||||||||||||
Notes payable outstanding balance | 31,973 | 8,783 | |||||||||||||||||||||||||||||
Monthly interest rate | 0.67% | ||||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 30,000 | $ 365 | |||||||||||||||||||||||||||||
Repayments of debt | $ 1,307 | ||||||||||||||||||||||||||||||
CEO [Member] | |||||||||||||||||||||||||||||||
Interest rate | 0.75% | ||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 65,000 | ||||||||||||||||||||||||||||||
Accrued interest balance | 47,768 | 43,381 | |||||||||||||||||||||||||||||
Related party principal shareholder [Member] | |||||||||||||||||||||||||||||||
Interest rate | 6.00% | ||||||||||||||||||||||||||||||
Maturity date | Oct. 31, 2015 | ||||||||||||||||||||||||||||||
Accrued interest balance | $ 8,616 | $ 8,616 | $ 8,616 | ||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 310,000 | ||||||||||||||||||||||||||||||
Promissory new note [Member] | |||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 27,750 | ||||||||||||||||||||||||||||||
Interest rate | 6.00% | 6.00% | 6.00% | ||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 320,166 | $ 320,166 | $ 320,166 | ||||||||||||||||||||||||||||
Repayments of debt | 27,007 | ||||||||||||||||||||||||||||||
Non-interest bearing OID promissory [Member] | |||||||||||||||||||||||||||||||
Notes payable outstanding balance | 0 | 4,578 | |||||||||||||||||||||||||||||
Loss on conversion | $ 55,484 | ||||||||||||||||||||||||||||||
Repayments of debt | $ 7,078 | ||||||||||||||||||||||||||||||
Debt default terms | A 25% penalty is due if the balance is not paid by the due date. Furthermore, 5% of all factor payments to the Company are to be used to pay down the note. | ||||||||||||||||||||||||||||||
Debt conversion term | On September 21, 2015, the shareholder agreed to convert $81,250 of the $165,000 outstanding note to 506,421 shares of the Companys common stock and the addition of the 25% penalty as stated above in the amount of $41,250, with a new note balance of $125,000, 15-month term and 8% interest. | ||||||||||||||||||||||||||||||
Private Placement [Member] | |||||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 1,800,000 | ||||||||||||||||||||||||||||||
Original issue discount | 5.00% | ||||||||||||||||||||||||||||||
Senior secured and warrant exercisable securities, shares | 2,500,000 | 250,000 | |||||||||||||||||||||||||||||
Expiration period | 5 years | ||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.35 | $ 0.40 | |||||||||||||||||||||||||||||
Fair value of the warrants | $ 466,031 | ||||||||||||||||||||||||||||||
Accrued interest rate | 14.00% | ||||||||||||||||||||||||||||||
Additional accrued interest rate | 2.00% | ||||||||||||||||||||||||||||||
Postponement payment | $ 5,000 | ||||||||||||||||||||||||||||||
Placement agents fees | 137,000 | ||||||||||||||||||||||||||||||
Total debt funding | $ 1,800,000 | ||||||||||||||||||||||||||||||
Warrants issued to placement agent | 200,000 | ||||||||||||||||||||||||||||||
Warrants issued to placement agent, fair value | $ 43,272 | ||||||||||||||||||||||||||||||
Payment of additional obligations at closing | 690,110 | ||||||||||||||||||||||||||||||
Net proceeds from placement agreement | 1,518,000 | ||||||||||||||||||||||||||||||
Debt issuance expenses | 40,000 | ||||||||||||||||||||||||||||||
Original issue discount | 90,000 | ||||||||||||||||||||||||||||||
Warrants compensation paid to placement agent | $ 200,000 | ||||||||||||||||||||||||||||||
Legel fees | 10,000 | ||||||||||||||||||||||||||||||
Total cash issue costs | $ 192,000 | ||||||||||||||||||||||||||||||
Debt Purchase Agreement [Member] | |||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 93,950 | 93,950 | |||||||||||||||||||||||||||||
Accrued interest balance | 10,568 | 8,454 | 4,228 | ||||||||||||||||||||||||||||
Premium | $ 46,975 | ||||||||||||||||||||||||||||||
Vendor [Member] | |||||||||||||||||||||||||||||||
Notes payable outstanding balance | 50,000 | 50,000 | |||||||||||||||||||||||||||||
Accrued interest balance | $ 6,011 | $ 4,723 | |||||||||||||||||||||||||||||
Monthly interest rate | 0.00% | 1.00% | |||||||||||||||||||||||||||||
Facility Team of Ontario [Member] | |||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 2,500 | ||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 30,000 | $ 52,500 | |||||||||||||||||||||||||||||
Settlement amount | $ 60,000 | ||||||||||||||||||||||||||||||
Stockholder [Member] | |||||||||||||||||||||||||||||||
Notes payable outstanding balance | 52,500 | ||||||||||||||||||||||||||||||
Accrued interest balance | 4,578 | 4,578 | |||||||||||||||||||||||||||||
Loss on conversion | 55,484 | ||||||||||||||||||||||||||||||
Shareholder [Member] | |||||||||||||||||||||||||||||||
Notes payable outstanding balance | 241,346 | ||||||||||||||||||||||||||||||
Accrued interest balance | $ 7,078 | ||||||||||||||||||||||||||||||
Principal amount paid | 125,000 | ||||||||||||||||||||||||||||||
Total amount due to shareholder | 132,078 | ||||||||||||||||||||||||||||||
Unrelated party investor [Member] | |||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 19,108 | ||||||||||||||||||||||||||||||
Related party principal shareholder [Member] | |||||||||||||||||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||||||||||||||||
Notes payable outstanding balance | 111,645 | ||||||||||||||||||||||||||||||
Maturity date | Feb. 11, 2017 | ||||||||||||||||||||||||||||||
Proceeds from loan | $ 111,645 | ||||||||||||||||||||||||||||||
Related party loan from CEO [Member] | |||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 1,052 | ||||||||||||||||||||||||||||||
Interest rate | 7.99% | ||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 59,925 | 58,610 | |||||||||||||||||||||||||||||
Proceeds from loan | 60,000 | ||||||||||||||||||||||||||||||
Fees on loan proceeds | $ 75 | ||||||||||||||||||||||||||||||
Former CEO of ISA [Member] | |||||||||||||||||||||||||||||||
Notes payable outstanding balance | 7,670 | $ 30,378 | |||||||||||||||||||||||||||||
Wife of CEO [Member] | |||||||||||||||||||||||||||||||
Interest rate | 0.67% | ||||||||||||||||||||||||||||||
Notes payable outstanding balance | 56,500 | 36,500 | |||||||||||||||||||||||||||||
Accrued interest balance | 6,344 | $ 3,052 | |||||||||||||||||||||||||||||
Proceeds from loan | $ 5,000 | $ 10,000 | $ 20,000 | 9,500 | $ 12,000 | ||||||||||||||||||||||||||
Driginal Issue Discount (OID) promissory note [Member] | |||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 1,535 | ||||||||||||||||||||||||||||||
Interest rate | 1.50% | ||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 15,000 | 13,369 | $ 15,000 | ||||||||||||||||||||||||||||
Maturity date | Dec. 15, 2016 | ||||||||||||||||||||||||||||||
Accrued interest balance | $ 2,651 | ||||||||||||||||||||||||||||||
Monthly interest rate | 0.67% | ||||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 17,651 | ||||||||||||||||||||||||||||||
Two promissory notes [Member] | |||||||||||||||||||||||||||||||
Notes payable outstanding balance | 275,660 | 275,660 | 16,808 | 275,660 | $ 212,693 | ||||||||||||||||||||||||||
Loss on conversion | $ 115,139 | $ 115,139 | $ 115,139 | ||||||||||||||||||||||||||||
Monthly interest rate | 2.50% | ||||||||||||||||||||||||||||||
Shares exchanged in debt | 1,002,401 | ||||||||||||||||||||||||||||||
TrueVue360, Inc. [Member] | |||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 2,100 | ||||||||||||||||||||||||||||||
Interest rate | 1.50% | 1.50% | 1.50% | ||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 28,040 | $ 28,040 | $ 28,040 | ||||||||||||||||||||||||||||
Accrued interest balance | $ 9,777 | $ 9,777 | $ 9,777 | ||||||||||||||||||||||||||||
Monthly interest rate | 0.00% | 0.00% | 0.00% | ||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 37,817 | ||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.28 | $ 0.28 | $ 0.28 | ||||||||||||||||||||||||||||
Warrants issued to placement agent | 501,201 | 501,201 | 501,201 | ||||||||||||||||||||||||||||
OID promissory note [Member] | |||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 968 | ||||||||||||||||||||||||||||||
Interest rate | 2.50% | ||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 10,000 | $ 8,431 | $ 10,593 | ||||||||||||||||||||||||||||
Maturity date | Dec. 15, 2016 | ||||||||||||||||||||||||||||||
Accrued interest balance | $ 1,131 | ||||||||||||||||||||||||||||||
Interest payment | $ 1,500 | ||||||||||||||||||||||||||||||
Monthly interest rate | 0.67% | ||||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 11,131 | ||||||||||||||||||||||||||||||
Placement Agent [Member] | |||||||||||||||||||||||||||||||
Expiration period | 3 years | ||||||||||||||||||||||||||||||
Payment to placement agent | $ 142,000 | ||||||||||||||||||||||||||||||
Warrants compensation paid to placement agent | $ 200,000 | ||||||||||||||||||||||||||||||
Strike price | $ 0.40 | ||||||||||||||||||||||||||||||
CW Electric [Member] | |||||||||||||||||||||||||||||||
Accrued interest balance | $ 8,032 | ||||||||||||||||||||||||||||||
Remitted amount out of proceeds in final settlement | 558,032 | ||||||||||||||||||||||||||||||
Agreed settlement amount | $ 550,000 |
NOTE 4 - LINE OF CREDIT (Narrat
NOTE 4 - LINE OF CREDIT (Narrative) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Apr. 02, 2015 |
Note 4 - Line Of Credit Narrative Details | |||
Line of Credit - Wells Fargo Bank | $ 38,827 | $ 40,216 | $ 40,000 |
Interest Rate | 10.00% |
NOTE 5 - COMMITMENTS AND CONT29
NOTE 5 - COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) | May 05, 2016 | Mar. 31, 2016 | Mar. 30, 2016 | Jan. 06, 2016 | Jul. 02, 2015 | Sep. 30, 2016 | May 31, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | May 13, 2016 | Mar. 28, 2016 | Jan. 27, 2016 | Jan. 22, 2016 | Dec. 31, 2015 | Oct. 28, 2015 | Dec. 10, 2008 |
Contingent lawsuit payable | $ 550,000 | $ 550,000 | $ 550,000 | $ 550,000 | |||||||||||||||
Delinquent portion of payroll taxes payable | 94,470 | 94,470 | 94,470 | 244,470 | |||||||||||||||
Payroll tax payable | $ 408,186 | 408,186 | 408,186 | 296,215 | |||||||||||||||
Monthly payroll installment agreement amount | $ 25,000 | ||||||||||||||||||
Monthly installment payments | 150,000 | ||||||||||||||||||
Prepaid Assets amortized expenses | $ 59,803 | $ 108,421 | $ 229,277 | $ 233,553 | |||||||||||||||
Agent percentage of cash fee | 7.00% | ||||||||||||||||||
Strike price | $ 0.30 | $ 0.30 | $ 0.30 | ||||||||||||||||
Expiration period | 3 years | ||||||||||||||||||
Term of agreement | 5 years | ||||||||||||||||||
Percentage payable on last day of month following closing | 50.00% | ||||||||||||||||||
Initial agreement amount with broker | $ 50,000 | $ 50,000 | $ 50,000 | ||||||||||||||||
Payment to broker | $ 6,500 | ||||||||||||||||||
Corky Wells Electric [Member] | |||||||||||||||||||
Promissory note | $ 741,329 | ||||||||||||||||||
Interest rate | 18.00% | ||||||||||||||||||
Consultant [Member] | |||||||||||||||||||
Monthly payroll installment agreement amount | $ 3,000 | ||||||||||||||||||
Financing from third party through consultant | $ 1,500,000 | ||||||||||||||||||
Equity to third party | $ 90,000 | ||||||||||||||||||
Restricted common stock granted to consultant | 125,000 | 125,000 | 125,000 | 20,000 | |||||||||||||||
Restricted common stock granted to consultant, amount | $ 100 | ||||||||||||||||||
Prepaid Assets | $ 27,400 | $ 27,400 | $ 27,400 | ||||||||||||||||
Prepaid Assets amortized period | 3 months | ||||||||||||||||||
Prepaid Assets amortized expenses | $ 27,400 | ||||||||||||||||||
Additional shares to be granted after completion of agreement | 30,000 | ||||||||||||||||||
Consideration payable for advisory services, non-refundable | $ 5,000 | ||||||||||||||||||
Consideration payable upon completion of any transaction | $ 5,000 | ||||||||||||||||||
Initial amount paid to consultant | $ 2,500 | ||||||||||||||||||
Agreement with Investment Banker [Member] | |||||||||||||||||||
Strike price | $ 0.30 | ||||||||||||||||||
Expiration period | 5 years | ||||||||||||||||||
General financial advisory and investment banking services per month | $ 10,000 | ||||||||||||||||||
Term of agreement | 6 months | ||||||||||||||||||
Percentage payable on last day of month following closing | 50.00% | ||||||||||||||||||
Shares issued to investment banker, vested shares | 912,000 | ||||||||||||||||||
Warrants issued to purchase common stock | 302,000 | ||||||||||||||||||
Private Placement [Member] | |||||||||||||||||||
Value of shares authorized for issuance | $ 5,000,000 | ||||||||||||||||||
Fee for placement | $ 15,000 | ||||||||||||||||||
Agent percentage of senior debt fee | 5.00% | ||||||||||||||||||
Agent percentage of cash fee | 8.00% | ||||||||||||||||||
Agent percentage of warrant fee | 8.00% | ||||||||||||||||||
Strike price | $ 0.35 | $ 0.40 | $ 0.35 | ||||||||||||||||
Expiration period | 3 years | ||||||||||||||||||
Senior secured and warrant exercisable securities, shares | 2,500,000 | 250,000 | 2,500,000 | ||||||||||||||||
Accrued interest rate | 14.00% | ||||||||||||||||||
Additional accrued interest rate | 2.00% | 2.00% | |||||||||||||||||
Payment of the cash fee | $ 5,000 | ||||||||||||||||||
Scenario, Previously Reported [Member] | |||||||||||||||||||
Contingent lawsuit payable | $ 1,411,650 | ||||||||||||||||||
Scenario, Previously Reported [Member] | Corky Wells Electric [Member] | |||||||||||||||||||
Contingent lawsuit payable | $ 1,411,650 |
NOTE 6 - RELATED PARTIES (Narra
NOTE 6 - RELATED PARTIES (Narrative) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Notes and loans payable to related parties | $ 611,352 | $ 486,964 |
Unpaid interest | 67,563 | 50,873 |
Due to the former parent | 36,400 | 30,070 |
Administrative Services Agreement [Member] | ||
Due to the former parent | $ 11,788 | $ 5,173 |
NOTE 7 - STOCKHOLDERS' DEFICIT
NOTE 7 - STOCKHOLDERS' DEFICIT (Narrative) (Details) - USD ($) | Mar. 31, 2016 | Mar. 30, 2016 | Jan. 06, 2016 | May 31, 2016 | Jan. 22, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Term of agreement | 5 years | |||||||
Exercise price | $ 0.30 | |||||||
Expiration period | 3 years | |||||||
Warrants exchanged | 5,250 | 5,250 | ||||||
Loss on settlement charged to operations | $ 630 | |||||||
Common stock issued in exchange of warrants | 2,100 | |||||||
Common stock issued for services, shares | 125,000 | 253,977 | ||||||
Common stock issued for services, value | $ 27,400 | $ 35,000 | ||||||
Percentage payable on last day of month following closing | 50.00% | |||||||
Fair value of the warrants | $ 466,031 | |||||||
Preferred stock shares authorized | 10,000,000 | 10,000,000 | ||||||
Preferred stock shares par value | $ 0.001 | $ 0.001 | ||||||
Series A Preferred Stock [Member] | ||||||||
Preferred stock shares authorized | 500,000 | |||||||
Preferred stock shares par value | $ 10 | |||||||
Percentage of accrued dividend | 8.00% | |||||||
Conversion of stock price per share of common stock | $ 0.18 | |||||||
Redemption period of dividends | 3 years | |||||||
Prepayments for stock | $ 140,000 | |||||||
Private Placement [Member] | ||||||||
Exercise price | $ 0.35 | $ 0.40 | $ 0.35 | |||||
Expiration period | 3 years | |||||||
Warrants compensation paid to placement agent | $ 200,000 | |||||||
Fair value of the warrants | $ 43,272 | |||||||
Senior secured and warrant exercisable securities, shares | 2,500,000 | 250,000 | 2,500,000 | |||||
Agreement with Investment Banker [Member] | ||||||||
General financial advisory and investment banking services per month | $ 10,000 | |||||||
Term of agreement | 6 months | |||||||
Shares issued to investment banker, vested shares | 912,000 | |||||||
Warrants issued to purchase common stock | 302,000 | |||||||
Exercise price | $ 0.30 | |||||||
Expiration period | 5 years | |||||||
Percentage payable on last day of month following closing | 50.00% |
NOTE 8 - COMMON STOCK PURCHAS32
NOTE 8 - COMMON STOCK PURCHASE WARRANTS (Schedule of activity of warrants) (Details) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Number of Warrants | |
Outstanding at the beginning of the year | shares | 609,340 |
Warrants expired | shares | (5,250) |
Warrants issued with debt or debt modifications | shares | 3,002,000 |
Warrants exchanged for common stock | shares | (5,250) |
Outstanding at end of period | shares | 3,600,840 |
Exercisable at end of period | shares | 3,600,840 |
Weighted Avg. Exercise Price | |
Outstanding at the beginning of the year | $ / shares | $ 0.54 |
Warrants expired | $ / shares | 6.67 |
Warrants issued with debt or debt modifications | $ / shares | 0.35 |
Warrants exchanged for common stock | $ / shares | 6.67 |
Outstanding at end of period | $ / shares | 0.36 |
Exercisable at end of period | $ / shares | $ 0.36 |
Remaining Contractual Life (Years) | |
Outstanding at the beginning of the year | 4 years 3 months |
Warrants issued with debt or debt modifications | 4 years 4 months 6 days |
Outstanding at end of period | 4 years 3 months |
Exercisable at end of period | 4 years 3 months |
NOTE 8 - COMMON STOCK PURCHAS33
NOTE 8 - COMMON STOCK PURCHASE WARRANTS (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Jan. 22, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | |
Other Liabilities Disclosure [Abstract] | ||||
Expiration period | 5 years | |||
Strike price | $ 0.30 | |||
Warrants exchanged | 5,250 | 5,250 | ||
Common shares issued | 2,100 | |||
Loss on settlement charged to operations | $ 630 | |||
Warrants expired | 3,750 | 1,500 | ||
Warrants issued to purchase common stock | $ 2,700,000 | $ 302,000 |
NOTE 9 - SUBSEQUENT EVENTS (Det
NOTE 9 - SUBSEQUENT EVENTS (Details) - USD ($) | Oct. 11, 2016 | Oct. 28, 2016 | Sep. 30, 2016 | Mar. 28, 2016 |
Monthly payroll installment agreement amount | $ 25,000 | |||
Series A Preferred Stock [Member] | ||||
Prepayments for stock | $ 140,000 | |||
Subsequent Event [Member] | ||||
Monthly payroll installment agreement amount | $ 25,000 | |||
Subsequent Event [Member] | Series A Preferred Stock [Member] | ||||
Prepayment from a shareholder | $ 8,000 | |||
Shares repurchased during period | 29,600 | |||
Shares repurchased during period, value | $ 296,000 | |||
Subsequent Event [Member] | Series A Preferred Stock [Member] | ||||
Temporary Equity | 296,000 | |||
Prepayments for stock | $ 148,000 |