Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Apr. 02, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | Duos Technologies Group, Inc. | ||
Entity Central Index Key | 1,396,536 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
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 Public Float | $ 10,137,838 | ||
Entity Common Stock, Shares Outstanding | 20,657,850 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash | $ 1,941,818 | $ 174,376 |
Accounts receivable | 298,304 | 256,989 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 423,793 | 476,673 |
Prepaid expenses and other current assets | 90,923 | 135,964 |
Total Current Assets | 2,754,838 | 1,044,002 |
Property and Equipment, net | 65,362 | 66,491 |
OTHER ASSETS: | ||
Patents and trademarks, net | 45,978 | 51,423 |
Total Other Assets | 45,978 | 51,423 |
TOTAL ASSETS | 2,866,178 | 1,161,916 |
CURRENT LIABILITIES: | ||
Accounts payable | 812,618 | 842,787 |
Accounts payable - related parties | 12,598 | 40,136 |
Notes payable - financing agreements | 49,657 | 46,368 |
Notes payable - related parties | 9,078 | 529,485 |
Notes payable, net of discounts | 87,210 | |
Convertible notes payable, including premiums | 193,950 | |
Warrant derivative liability | 793,099 | |
Line of credit | 34,513 | 38,019 |
Payroll taxes payable | 149,448 | 444,476 |
Accrued expenses | 497,277 | 1,218,105 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 200,410 | 219,625 |
Deferred revenue | 438,907 | 675,171 |
Total Current Liabilities | 2,204,506 | 5,128,431 |
Notes payable - related party | 39,137 | 48,231 |
Notes payable, net of discounts | 1,206,522 | |
Total Liabilities | 2,243,643 | 6,383,184 |
Series A redeemable convertible cumulative preferred stock, $10 stated value per share, 500,000 shares authorized;0 and 29,600 shares issued and outstanding at December 31, 2017 and December 31, 2016 ($0.00 and $301,920 liquidation value at December 31, 2017 and December 31, 2016, respectively) | 301,920 | |
Commitments and Contingencies (Note 10) | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock, $0.001 par value, 10,000,000 authorized, 9,485,000 available to be issued | ||
Common stock: $0.001 par value; 500,000,000 shares authorized 20,657,850 and 1,892,020 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively | 20,658 | 1,892 |
Additional paid-in capital | 26,608,823 | 18,141,629 |
Total stock & paid-in-capital | 26,629,481 | 18,143,521 |
Accumulated deficit | (28,688,946) | (23,518,709) |
Sub-total | (2,059,465) | (5,375,188) |
Less: Treasury stock (3,280 shares of common stock) | (148,000) | (148,000) |
Total Stockholders' Equity (Deficit) | 622,535 | (5,523,188) |
Total Liabilities and Stockholders' Equity (Deficit) | 2,866,178 | 1,161,916 |
Series B Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock, $0.001 par value, 10,000,000 authorized, 9,485,000 available to be issued | $ 2,830,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Series A redeemable convertible cumulative preferred stock, stated value per share | $ 10 | $ 10 |
Series A redeemable convertible cumulative preferred stock, shares designated | 500,000 | 500,000 |
Series A redeemable convertible cumulative preferred stock, shares issued | 0 | 29,600 |
Series A redeemable convertible cumulative preferred stock, shares outstanding | 0 | 29,600 |
Series A redeemable convertible cumulative preferred stock, liquidation value | $ 0 | $ 301,920 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, available to be designated | 9,485,000 | 9,485,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 20,657,850 | 20,657,850 |
Common stock, shares outstanding | 1,892,020 | 1,892,020 |
Treasury stock shares | 3,280 | 3,280 |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 15,000 | 15,000 |
Preferred stock, shares issued | 2,830 | 0 |
Preferred stock, shares outstanding | 2,830 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
REVENUES: | ||
Project | $ 1,884,079 | $ 3,200,182 |
Maintenance and technical support | 1,127,932 | 2,230,633 |
IT asset management services | 872,577 | 674,078 |
Total Revenues | 3,884,588 | 6,104,893 |
COST OF REVENUES: | ||
Project | 1,487,516 | 1,580,665 |
Maintenance and technical support | 458,960 | 785,872 |
IT asset management services | 348,076 | 365,914 |
Total Cost of Revenues | 2,294,552 | 2,732,451 |
GROSS PROFIT | 1,590,036 | 3,372,442 |
OPERATING EXPENSES: | ||
Selling and marketing expenses | 179,318 | 278,264 |
Salaries, wages and contract labor | 3,098,782 | 3,370,191 |
Research and development | 310,099 | 271,950 |
Professional Fees | 393,531 | 306,458 |
General and administrative expenses | 1,051,799 | 889,685 |
Total Operating Expenses | 5,033,529 | 5,116,548 |
LOSS FROM OPERATIONS | (3,443,494) | (1,744,106) |
OTHER INCOME (EXPENSES): | ||
Interest expense | (4,519,035) | (561,174) |
Gain on settlement of debt | 64,647 | |
Warrant derivative gain (loss) | 2,743,686 | (264,099) |
Other income, net | 1,719 | 7,766 |
Total Other Income (Expense) | (1,708,983) | (817,507) |
NET LOSS | (5,152,477) | (2,561,613) |
Series A preferred stock dividends | (17,760) | (5,920) |
Net loss applicable to common stock | $ (5,170,237) | $ (2,567,533) |
NET LOSS APPLICABLE TO COMMON STOCK PER COMMON SHARE: | ||
Basic & Diluted | $ (1.43) | $ (1.36) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||
Basic & Diluted | 3,606,401 | 1,883,598 |
STATEMENTS OF CHANGES IN STOCKH
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock | Total |
Balance at Dec. 31, 2015 | $ 1,851 | $ 17,127,675 | $ (20,951,176) | $ (3,758,723) | ||
Balance, shares at Dec. 31, 2015 | 1,850,789 | |||||
Common stock issued for services | $ 41 | 349,659 | 351,100 | |||
Common stock issued for services, shares | 41,171 | |||||
Exchange of warrants for common stock | 628 | 630 | ||||
Exchange of warrants for common stock, shares | 60 | |||||
Warrants issued for services | 90,036 | 90,036 | ||||
Warrants issued with debt | 509,303 | 509,303 | ||||
Common stock repurchased | (148,000) | (148,000) | ||||
Series A preferred stock dividends | (5,920) | (5,920) | ||||
Net Loss | (2,561,613) | (2,561,613) | ||||
Balance at Dec. 31, 2016 | $ 1,892 | 18,141,629 | (23,518,709) | (148,000) | (5,523,188) | |
Balance, shares at Dec. 31, 2016 | 1,892,020 | |||||
Common stock issued for settlement of accounts payable | $ 360 | 214,640 | 215,000 | |||
Common stock issued for settlement of accounts payable, Shares | 359,650 | |||||
Promissory notes settled by issuance of common stock | $ 1,742 | 945,524 | 947,266 | |||
Promissory notes settled by issuance of common stock, shares | 1,741,637 | |||||
Issuance of origination shares (JMJ) | $ 1,500 | 748,500 | 750,000 | |||
Issuance of origination shares (JMJ), Shares | 1,500,000 | |||||
Officer salary settled for common stock | $ 701 | 699,842 | 700,543 | |||
Officer salary settled for common stock, shares | 700,543 | |||||
Series A preferred stock dividends | (17,760) | (17,760) | ||||
Issuance of common stock | $ 14,464 | 7,217,536 | 7,232,000 | |||
Issuance of common stock, Shares | 14,464,000 | |||||
Warrant liability extinguished | 95,760 | 95,760 | ||||
Stock issuance costs | (1,454,610) | (1,454,610) | ||||
Series B convertible preferred stock issued for cash | $ 1,000,000 | 1,000,000 | ||||
Series B convertible preferred stock issued for cash, Shares | 1,000 | |||||
Series B convertible preferred stock issued for debt conversion | $ 1,830,000 | 1,830,000 | ||||
Series B convertible preferred stock issued for debt conversion, Shares | 1,830 | |||||
Net Loss | (5,152,477) | (5,152,477) | ||||
Balance at Dec. 31, 2017 | $ 2,830,000 | $ 20,658 | $ 26,608,823 | $ (28,688,946) | $ (148,000) | $ 622,535 |
Balance, shares at Dec. 31, 2017 | 2,830 | 20,657,850 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash from operating activities: | ||
Net Loss | $ (5,152,477) | $ (2,561,613) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 48,283 | 47,051 |
Gain on settlement of debt | (64,647) | |
Stock and warrants issued for services | 90,036 | |
Stock issued per origination | 750,000 | |
Amortization of debt discounts | 2,724,389 | 243,427 |
Amortization of stock based prepaid consulting fees | 351,100 | |
Loss related to warrants exchanged for stock | 630 | |
Initial fair value of warrant liability | 735,347 | |
Warrant derivative gain/loss | (2,743,686) | 264,099 |
Changes in assets and liabilities: | ||
Accounts receivable | (41,315) | 195,246 |
Costs and estimated earnings on uncompleted contracts | 52,880 | (55,557) |
Prepaid expenses and other current assets | 263,827 | 252,282 |
Accounts payable | 184,829 | (221,379) |
Accounts payable-related party | (27,538) | 10,066 |
Payroll taxes payable | (295,028) | 148,261 |
Accrued expenses | 258,307 | 262,535 |
Contingent lawsuit liability | (550,000) | |
Billings in excess of costs and earnings on uncompleted contracts | (19,215) | (83,439) |
Deferred revenue | (236,262) | (233,035) |
Net cash used in operating activities | (3,562,306) | (1,840,290) |
Cash flows from investing activities: | ||
Purchase of patents/trademarks | (70) | |
Purchase of fixed assets | (41,709) | (35,345) |
Net cash used in investing activities | (41,709) | (35,415) |
Cash flows from financing activities: | ||
Proceeds from issuance of series A preferred stock | 296,000 | |
Proceeds of advance payments-stock repurchase | (148,000) | |
Proceeds from related party notes | 221,570 | |
Proceeds from note payable | 1,333,500 | |
Proceeds from series B convertible preferred stock | 1,000,000 | |
Proceeds from common stock, net | 5,777,390 | |
Repayments of financing agreements | (217,470) | |
Repayments of line of credit | (3,506) | |
Repayments of related party notes | (432,527) | (130,818) |
Repayments of insurance and equipment financing | (220,800) | |
Repayments of notes payable | (1,766,250) | (155,000) |
Redemption of series A convertible stock and payment of accrued dividends | (319,680) | |
Proceeds of notes payable, net of $358,263 cash fees | 2,047,000 | |
Net cash provided by financing activities | 5,371,457 | 1,909,952 |
Net increase in cash | 1,767,442 | 34,247 |
Cash, beginning of period | 174,376 | 140,129 |
Cash, end of period | 1,941,818 | 174,376 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid | 126,975 | 245,134 |
Taxes paid | 10,149 | |
Supplemental Non-Cash Investing and Financing Activities: | ||
Common stock issued for prepaid consulting services | 351,100 | |
Common stock issued for accounts payable | 215,000 | |
Common stock issued for related party notes payable | 95,000 | |
Common stock issued for loans and convertible notes | 2,424,371 | |
Common stock issued for accrued interest and penalties | 257,895 | |
Common stock issued for accrued officer salary | 700,543 | |
Increase in debt discount and paid-in capital for warrants issued with debt | 791,303 | |
Accrued interest forgiven related to note payable settlement | 20,697 | |
Debt discount related to notes payable | 1,571,250 | |
Note issued for financing of insurance premiums | 220,760 | 223,154 |
Accrued dividends | $ 17,760 | $ 5,920 |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Statement of Cash Flows [Abstract] | |
Cash fees | $ 358,263 |
NOTE 1 - NATURE OF OPERATIONS A
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations 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.” duostech’s IP is built upon two of its core technology platforms (praes i ® i ® The Company’s strategy includes expansion of its technology base through organic development efforts, strategic partnerships, and growth through strategic acquisitions. duostech’s 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. ISA’s 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. Reclassification Certain amounts in the 2016 balance sheet have been reclassified from notes payable related parties - current to notes payable related parties - long-term to conform to the 2017 presentation. This reclassification caused notes payable related parties – long-term in 2016 to be increased by $48,231 and notes payable related parties – current to be decreased by the same amount. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All share and per share amounts have been presented to give retroactive effect to a 1 for 35 reverse stock split that occurred in May 2017. Principles of Consolidation The 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 intangible and other long-lived assets, estimates of percentage completion on projects and related revenues, valuation of stock-based compensation, valuation of derivatives, valuation of warrants issued with debt, valuation of beneficial conversion features in convertible debt, and valuation of stock-based awards. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Cash and Cash Equivalents For the purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be a cash equivalent. There were no cash equivalents at December 31, 2017 or 2016. 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. As of December 31, 2017, balance in one financial institution exceeded federally insured limits by $1,724,594. There were no amounts on deposit in excess of federally insured limits at December 31, 2016. Significant Customers and Concentration of Credit Risk Major Customers and Accounts Receivable The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows: Geographic Concentration Approximately 4.35% and 20.89% of revenue in 2017 and 2016, respectively, is generated from customers outside of the United States. Accounting for Derivatives The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. Fair Value of Financial Instruments and Fair Value Measurements We measure our financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short maturities. Amounts recorded for notes payable, net of discount, and loans payable also approximate fair value because current interest rates available to us for debt with similar terms and maturities are substantially the same. We follow accounting guidance for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs, other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. Accounts Receivable Accounts receivable are stated at estimated net realizable value. Accounts receivable are comprised of balances due from customers net of estimated allowances for uncollectible accounts. In determining the collections on the account, historical trends are evaluated and specific customer issues are reviewed to arrive at appropriate allowances. The Company reviews its accounts to estimate losses resulting from the inability of its customers to make required payments. Any required allowance is based on specific analysis of past due accounts and also considers historical trends of write-offs. Past due status is based on how recently payments have been received from customers. Property and Equipment Property and equipment is stated at cost, less accumulated depreciation. Depreciation is provided by the straight-line method over the estimated economic life of the property and equipment (three to five years). When assets are sold or retired, their costs and accumulated depreciation are eliminated from the accounts and any gain or loss resulting from their disposal is included in the statement of operations. Leasehold improvements are expensed over the shorter of the term of our lease or their useful lives. Software Development Costs The Company accounts for costs incurred to develop or purchase computer software for internal use in accordance with FASB ASC 350-40 “Internal-Use Software” or ASC 350-50 "Website Costs". Costs incurred during the preliminary project stage along with post-implementation stages of internal use computer software are expensed as incurred. Costs incurred to maintain existing product offerings are expensed as incurred. Patents and Trademarks Patents and trademarks which are stated at amortized cost, relate to the development of video surveillance security system technology and are being amortized over 17 years. Long-Lived Assets The Company evaluates the recoverability of its property, equipment, and other long-lived assets in accordance with FASB ASC 360-10-35-15 “Impairment or Disposal of Long-Lived Assets”, which requires recognition of impairment of long-lived assets in the event the net book value of such assets exceed the estimated future undiscounted cash flows attributable to such assets or the business to which such intangible assets relate. This guidance requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Accrual of Legal Costs Associated with Loss Contingencies The Company expenses legal costs associated with loss contingencies, as incurred. Product Warranties The Company has a 90 day warranty period for materials and labor after final acceptance of all projects. If any parts are defective they are replaced under our vendor warranty which is usually 12-36 months. Final acceptance terms vary by customer. Some customers have a cure period for any material deviation and if the Company fails or is unable to correct any deviations, a full refund of all payments made by the customer will be arranged by the Company. As of December 31, 2017 and 2016, management considers all final acceptance terms have been met; therefore no accrual of warranty reserves has been made. Loan Costs Loan costs paid to lenders or third-parties are recorded as debt discounts to the related loans and amortized to interest expense over the loan term. Sales Returns Liabilities Our systems are sold as integrated systems and there are no sales returns allowed. Revenue Recognition Project Revenue The Company constructs intelligent technology systems consisting of materials and labor under customer contracts. Revenues and related costs on project revenue are recognized using the “percentage of completion method” of accounting in accordance with ASC 606-10-55-20, “Construction-Type and Production-Type Contracts”. Under this method, contract revenues are recognized over the performance period of the contract in direct proportion to the costs incurred as a percentage of total estimated costs for the entirety of the contract. Costs include direct material, direct labor, subcontract labor and other allocable indirect costs. All un-allocable indirect costs and corporate general and administrative costs are also charged to the periods as incurred. Any recognized revenues that have not been billed to a customer are recorded as an asset in “costs and estimated earnings in excess of billings on uncompleted contracts”. Any billings of customers in excess of recognized revenues are recorded as a liability in “billings in excess of costs and estimated earnings on uncompleted contracts”. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. A contract is considered complete when all costs except insignificant items have been incurred and the installation is operating according to specifications or has been accepted by the customer. The Company has contracts in various stages of completion. Such contracts require estimates to determine the appropriate cost and revenue recognition. Costs estimates are reviewed periodically on a contract-by-contract basis throughout the life of the contract such that adjustments to the profit resulting from revisions are made cumulative to the date of the revision. Significant management judgments and estimates, including the estimated costs to complete projects, must be made and used in connection with the revenue recognized in the accounting period. Current estimates may be revised as additional information becomes available. Maintenance and Technical Support Maintenance and technical support services are provided on both an as-needed and extended-term basis and may include providing both parts and labor. Maintenance and technical support provided outside of a maintenance contract are on an as-requested basis, and revenue is recognized as the services are provided. Revenue for maintenance and technical support provided on an extended-term basis is recognized ratably over the term of the contract. For sales arrangements that do not involve multiple elements such as professional services, which are of short-term duration, revenues are recognized when services are completed. IT Asset Management Services The Company recognizes revenue from its IT asset management business in accordance with the Securities and Exchange Commission (the “SEC”) Staff Accounting Bulletin No. 104, "Revenue Recognition" and Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 985-605-25 which addresses Revenue Recognition for the software industry. The general criteria for revenue recognition under ASC 985-605 for our Company, which sells software licenses, which do not require any significant modification or customization, is that revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. The Company’s IT asset management business generates revenues from three sources: (1) Professional Services (consulting and auditing); (2) Software licensing with optional hardware sales and (3) Customer Service (training and maintenance support). For sales arrangements that do not involve multiple elements: (1) Revenues for professional services, which are of short-term duration, are recognized when services are completed; (2) For all periods reflected in this report, software license sales have been one-time sales of a perpetual license to use our software product and the customer also has the option to purchase third party manufactured handheld devices from us if they purchase our software license. Accordingly, the revenue is recognized upon delivery of the software and delivery of the hardware, as applicable, to the customer; (3) Training sales are one-time upfront short-term training sessions and are recognized after the service has been performed; and (4) Maintenance/support is an optional product sold to our software license customers under one-year contracts. Accordingly, maintenance payments received upfront are deferred and recognized over the contract term. Multiple Elements Arrangements with customers may involve multiple elements including project revenue and maintenance services in our Intelligent Technology Systems business. Maintenance will occur after the project is completed and may be provided on an extended-term basis or on an as-needed basis. In our IT Asset Management business, multiple elements may include any of the above four sources. Training and maintenance on software products may occur after the software product sale while other services may occur before or after the software product sale and may not relate to the software product. Revenue recognition for multiple element arrangement is as follows: Each element is accounted for separately when each element has value to the customer on a standalone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price of the items when sold separately. Once the selling price is allocated, the revenue for each element is recognized using the applicable criteria under GAAP as discussed above for elements sold in non-multiple element arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company sells its various services and software and hardware products at established prices on a standalone basis which provides Company specific objective evidence of selling price for purposes of multiple element relative selling price allocation. The Company only sells maintenance services or spare parts based on its established rates after it has completed a system integration project for a customer. The customer is not required to purchase maintenance services. All elements in multiple element arrangements with Company customers qualify as separate units of account for revenue recognition purposes. Deferred Revenue Deferred revenues represent billings or cash received in excess of revenue recognizable on service agreements that are not accounted for under the percentage of completion method. Advertising The Company expenses the cost of advertising. During the years ended December 31, 2017 and 2016, there were no advertising costs. Share-Based Compensation Stock-based compensation is accounted for in accordance with the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the shorter of the period the employee or director is required to perform the services in exchange for the award or the vesting period. The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date”. The expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. Income Taxes The Company accounts for income taxes in accordance with the Financial Accounting Standards Board FASB Accounting Standards Codification (“ASC”) 740, Income Taxes, which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company evaluates all significant tax positions as required by ASC 740. As of December 31, 2017, the Company does not believe that it has taken any positions that would require the recording of any additional tax liability nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next year. Any penalties and interest assessed by income taxing authorities are included in operating expenses. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. Tax years 2015, 2016 and 2017 remain open for potential audit. Earnings (Loss) Per Share Basic earnings per share (EPS) are computed by dividing net loss applicable to common stock by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss applicable to common stock 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, convertible preferred stock or other common stock equivalents. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. At December 31, 2017 and 2016, there were an aggregate of 25,216,332 and 710,238 outstanding warrants to purchase shares of common stock respectively; 0 and 122,707 shares of common stock issuable upon conversion of convertible debt respectively; and at December 31, 2017, 5,660,000 common shares were issuable upon conversion of Series B convertible preferred stock, all of which were excluded from the computation of dilutive earnings per share because their inclusion would have been anti-dilutive. Segment Information The Company operates in one reportable segment. 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 has adopted to this standard for their fiscal year beginning January 1, 2018 and it will not 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 | 12 Months Ended |
Dec. 31, 2017 | |
Going Concern [Abstract] | |
NOTE 2 - GOING CONCERN | NOTE 2 – GOING CONCERN As reflected in the accompanying consolidated financial statements, the Company had a net loss of $5,152,477 in 2017. During the same period, cash used in operating activities was $3,562,306. The accumulated deficit as of December 31, 2017 was $28,688,946. Some of these matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, drive significant additional revenue and become profitable. On November 24, 2017, the Company entered into a Securities Purchase Agreement and Registration Rights Agreement in the aggregate principal amount of $11,031,371. This amount was in the form of both cash and debt conversions. Part of the cash amount was used to retire long-term debt and payables including full payment to the Internal Revenue Service, excluding accrued late fees in the amount of $108,262, in which the Company has requested a waiver of the late fees. These actions leave the Company both debt free and current with all previous outstanding obligations. There remaining approximately $2 million will be used primarily as working capital to fund additional resources to support the anticipated growth in revenues for 2018. 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 without the requirement to raise additional capital for existing operations. Ultimately 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 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 - ACCOUNTS RECEIVABLE
NOTE 3 - ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2017 | |
Trade Accounts And Other Receivables [Abstract] | |
NOTE 3 - ACCOUNTS RECEIVABLE | NOTE 3 – ACCOUNTS RECEIVABLE Accounts receivable were as follows at December 31, 2017 and 2016: 2017 2016 Accounts receivable $ 298,304 $ 256,989 Allowance for doubtful accounts — — $ 298,304 $ 256,989 There was bad debt expense related to accounts receivable of $0 and $70,248 in 2017 and 2016, respectively. |
NOTE 4 - PROPERTY AND EQUIPMENT
NOTE 4 - PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
NOTE 4 - PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT The major classes of property and equipment are as follow at December 31, 2017 and 2016: 2017 2016 Furniture, fixtures and equipment $ 862,582 $ 1,136,003 Less: Accumulated depreciation (797,220 ) (1,069,512 ) $ 65,362 $ 66,491 During 2017, the Company recorded the disposal of $315,129 of fixed assets with no salvage value and no longer in service, to furniture, fixtures and equipment and to accumulated depreciation. Total depreciation in 2017 and 2016 was $42,838 and $41,398, respectively. |
NOTE 5 - PATENTS AND TRADEMARKS
NOTE 5 - PATENTS AND TRADEMARKS | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
NOTE 5 - PATENTS AND TRADEMARKS | NOTE 5 – PATENTS AND TRADEMARKS 2017 2016 Patents and trademarks $ 267,205 $ 267,205 Less: Accumulated amortization (221,227 ) (215,782 ) $ 45,978 $ 51,423 Total amortization of patents in 2017 and 2016 was $5,445 and $5,653 respectively. |
NOTE 6 - DEBT
NOTE 6 - DEBT | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
NOTE 6 - DEBT | NOTE 6 – DEBT Notes Payable - Financing Agreements The Company’s notes payable relating to financing agreements classified as current liabilities consist of the following as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Notes Payable Principal Interest Principal Interest Third Party - Insurance Note 1 $ 25,075 10.30 % $ 25,075 9.75 % Third Party - Insurance Note 2 11,679 10.00 % 9,861 10.00 % Third Party - Insurance Note 3 — 8.05 % — 8.05 % Third Party - Insurance Note 4 12,903 9.24 % 11,432 9.24 % Total $ 49,657 $ 46,368 The Company entered into an agreement on December 23, 2016 with its insurance provider by executing an $25,075 note payable (Insurance Note 1) issued to purchase an insurance policy, secured by that policy with an annual interest rate of 9.75% payable in monthly installments of principal and interest totaling $2,234 through October 23, 2017. The policy was renewed December 23, 2017 with a $25,075 note payable with an annual interest rate of 10.30%. The Company entered into an agreement on September 15, 2016 with its insurance provider by executing a $19,065 note payable (Insurance Note 2) issued to purchase an insurance policy, secured by that policy with an annual interest rate of 10% payable in monthly installments of principal and interest totaling $1,702 through June 30, 2017. The policy was renewed September 15, 2017 with an $19,065 note payable and annual interest rate of 10% payable in monthly installments of principal and interest totaling $1,581 through June 30, 2018. At December 31, 2017 and 2016, the note payable balance was $11,679 and $9,861, respectively. The Company entered into an agreement on February 3, 2016 with its insurance provider by executing an $123,571 note payable (Insurance Note 3) issued to purchase an insurance policy, secured by that policy with an annual interest rate of 8.05% payable in monthly installments of principal and interest totaling $12,818 through December 3, 2017. The note was renewed on February 3, 2017 in the amount of $127,620 with an annual interest rate of 8.05% payable in monthly installments of principal and interest totaling $13,252. At December 31, 2017 and 2016, the note payable balance was zero. The Company entered into 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, secured by that policy with an annual interest rate of 9.24% payable in monthly installments of principal and interest totaling $5,782 through February 1, 2017. The note was renewed on April 15, 2017 in the amount of $49,000 payable in monthly installments of principal and interest totaling $4,373 through February 15, 2018. At December 31, 2017 and 2016, the note payable balance was $12,903 and $11,432, respectively. Notes Payable - Related Parties The Company’s notes payable to related parties classified as current liabilities consist of the following as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Notes Payable Principal Interest Principal Interest Shareholder $ — 9 % $ 65,000 9 % Related party — 8 % 13,369 8 % Related party — — 10,504 — Related party — 8 % 56,500 8 % Related Party — — 3,170 — Related Party — 8 % 8,431 8 % CFO — 8 % 31,973 — Shareholder — 6 % 226,936 6 % CEO 9,078 8 % 8,383 — Shareholder — 8 % 105,219 — Sub-total current portion 9,078 529,485 Add long-term portion-CEO 39,137 48,231 Total $ 48,215 $ 577,716 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 sum of $65,000 accruing interest at 9% per annum. There was an accrued interest balance of $49,231 and $43,381 as of December 31, 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. On November 24, 2017, as part of the Private Offering Closing, the principal amount of $65,000 and accrued interest balance of $53,875 for a total of $118,875 was converted for 118,875 shares of common stock. (see Note 14) 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 18% per annum. 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 8% per annum and monthly payments of $1,535 commencing January 15, 2016. The Company made payments during the first quarter of 2016 in the amount of $4,282. As of December 31, 2016, the loan had an outstanding amount of $13,369 and there was an accrued interest balance of $802. On November 24, 2017, as part of the Private Offering Closing, the principal balance of $13,369 and accrued interest balance of $1,817 for a total of $15,186 was paid in full. 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 30% per annum. 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 Company’s TrueVue360 subsidiary 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 a further 30 days on 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 five-year warrants with a strike price of $0.28 as consideration for the conversion of the larger note and the zero-interest feature of the extended payment plan. The note was paid in full during 2017 and as of December 31, 2017 and 2016, the balance was zero and $10,504, respectively. On December 12, 2013, the wife of the CEO loaned the Company the sum of $10,000 at an annual percentage rate of 8%. 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 principal balance of $56,500 and accrued interest balance of $11,575 for a total of $68,075 was paid in full on November 27, 2017. The total principal due at December 31, 2017 and 2016 was zero and $56,500, respectively. There was accrued interest balance of zero and $7,474 as of December 31, 2017 and 2016, respectively. 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 ISA. These amounts are non-interest bearing and are due on demand. The Company made final payment during the first quarter of 2017. At December 31, 2017 and 2016, the loan had an outstanding balance of zero and $3,170, respectively. 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 30% per annum was restructured into a note due on or before December 15, 2016 for a total of $11,131 principal balance, accruing interest at 8% per annum and monthly payments of $968 commencing January 15, 2016. The Company made payments during the first quarter of 2016 in the amount of $2,700. As of December 31, 2016, the loan had an outstanding amount of $8,431 and there was an accrued interest balance of $506. On November 24, 2017, as part of the Private Offering Closing, the principal balance of $8,431 and accrued interest balance of $1,145 for a total of $9,576 was paid in full. 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 Company’s 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 8% per annum which is repayable by the Company when sufficient funds are available. The Company and CFO agreed to convert the loan balance of $30,000 in addition to the accrued interest balance of $4,020 for a total of $34,040 for 34,040 shares of common stock. The balance amount of $1,973 was applied to a travel advance with an outstanding balance due of zero and $31,973 at December 31, 2017 and 2016, respectively. 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 have agreed to replace the note with a new note in the amount of $320,166, which includes principal and accrued interest through October 31, 2015. Repayment shall occur with eleven monthly payments of $27,750 plus one final payment of $27,007 (including interest of 6%) beginning on or before December 31, 2015. On November 27, 2017, the Company paid the principal balance of $226,936 and the accrued interest balance of $12,684 for a total of $239,620. As of December 31, 2017 and 2016, the outstanding balance was zero and $226,936, respectively. 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 Company’s 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 December 31, 2017 and 2016, the outstanding balance was $48,215 and $56,614, respectively. (see Note 18) 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. On November 27, 2017, the principal amount of $105,219 and the accrued interest balance of $11,608 for a total of $116,827 was paid in full. As of December 31, 2017 and 2016, the outstanding balance was zero and $105,219, respectively. Notes Payable December 31, 2017 December 31, 2016 Payable To Principal Interest Principal Interest Shareholder $ — — $ 19,108 — Vendor — — 22,500 — Total $ — $ 41,608 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. The Company and shareholder agreed to convert the note amount of $19,108 to common stock effective November 24, 2017 for 38,216 shares of common stock at $0.50 per share. 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 December 31, 2017 and 2016, the outstanding balance was zero and $22,500, respectively. (see Note 10) Convertible Notes, Including Premiums December 31, 2017 December 31, 2016 Payable To Principal Premium Principal, Including Premium Principal Premium Principal, Including Premium Vendor $ — $ — $ — $ 50,000 $ 50,000 $ 100,000 Vendor — — — 46,975 46,975 93,950 Total $ — $ — $ — $ 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 Company’s common stock at a 50% discount to the average closing bid prices for the company’s 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 December 31, 2016 and 2015 was $50,000 and $50,000, respectively and accrued interest on December 31, 2016 and 2015 was $7,511 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, however, its offer was rejected. Payment was made on March 7, 2017 and a gain on settlement of $64,647 was recorded by the Company. 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 Company’s common stock at a 50% discount to the average price of the Company’s 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 each of December 31, 2016 and 2015, the outstanding balance on the note was $93,950 which includes the $46,975 premium and there was accrued interest on December 31, 2016 and 2015 of $12,682 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. Payment was made on March 7, 2017. Notes Payable – Third Parties December 31, 2017 December 31, 2016 Payable To Principal Less Unamortized Discounts Principal, Less Unamortized Discounts Principal Less Unamortized Discounts Principal, Less Unamortized Discounts Note 1-non-current $ — $ — $ — $ 1,800,000 $ 593,478 $ 1,206,522 Note 2-current — — — 605,263 559,661 45,602 Total $ — $ — $ — $ 2,405,263 $ 1,153,139 $ 1,252,124 Note 1 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 transaction on April 1, 2016. The transaction 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 Company’s 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 71,249 shares of common stock exercisable for five years at an exercise price of $12.25 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 agent’s 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. The amendment included (a) postponement of payment of the cash fee of $5,000 to 15 days after 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 5,715 shares at an exercise price of $14 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, which was previously accrued as of December 31, 2015, 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 Company’s 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 $192,000 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. As discussed above, the Company also issued 5,715 three-year warrants with an exercise price of $14 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. GPB Debt Holdings II, LLC Letter Agreement On August 1, 2017, the Company entered into a letter agreement with GPB Debt Holdings II LLC (“GPB”), whereby GPB agreed to convert $212,077 due and owing to it under that certain senior secured note issued by the Company on April 1, 2016 (“GPB Debt Obligation”) into common stock of the Company, contingent upon the completion of the Initial Offering (the “GPB Letter Agreement”). Pursuant to the GPB Letter Agreement, the GPB Debt Obligation will automatically convert upon consummation of the Initial Offering into such number of restricted shares of the Company’s common stock calculated by dividing the GPB Debt Obligation by the price per share of common stock paid by the investors in the Initial Offering. GPB has agreed to enter into a lock-up agreement prohibiting the sale or other transfer of all securities of the Company owned by him for a period of 6 months. Pursuant to the terms and conditions of the Note, the Company was to continue to make its monthly interest payments beginning on September 1, 2017 with a payment of $63,633 representing July 2017, August 2017 and September 2017 interest payments and payments thereafter until the Maturity Date. On the Maturity Date (as defined in the Note), GPB shall have the right, but not the obligation, to “put” to the Company any Conversion Shares issued to GPB pursuant to the Automatic Conversion that have not been sold for redemption in cash, in the amount equal to the number of such put Conversion Shares multiplied by the Conversion Price, payable within five days of the Company’s receipt of written notice indicating such election by GPB. Additionally, GPB will also be issued warrants, on the same terms and in substantially the same form offered to investors in the Initial Offering (the “Warrants”), except that such Warrants will be restricted securities, and will not trade on the OTC Markets OTCQB. On August 16, 2017, the company withdrew its registration statement and this letter agreement is no longer in effect. The Company has made no further interest payments on the note and has entered into a forbearance agreement with the lender. In connection with the conversion and redemption portion of the Private Offering, on the Effective Date, the Company entered into that certain Agreement to Convert Promissory Note (the “GPB Letter Agreement”) with GPB, whereby they agreed to convert $500,000 of liabilities 1,000,000 shares of common stock of the Company at a conversion price equal to $0.50 per share. Additionally, GPB was issued warrants to purchase 1,000,000 shares of the Company’s common stock at an exercise price equal to $0.65 per share, expiring five years from the Initial Exercise Date. Commencing on the Effective Date, GPB entered into a Lock-Up Agreement for a period of 365 days prohibiting the sale or other transfer of all securities of the Company owned by GPB. Note 2 On December 20, 2016, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with JMJ Financial, ("JMJ," and together with the Company, the "Parties") and borrowed an initial principal amount of $605,263 from the total available as discussed below. Pursuant to the Purchase Agreement, JMJ purchased from the Company (i) a Promissory Note in the aggregate principal amount of up to $2,500,000 (the "Note") for consideration of up to $2,350,000 net of an original issue discount of 5%, due and payable on the earlier of May 15, 2017 or the third business day after the closing of the Initial Offering (as defined therein), and (ii) a Common Stock Purchase Warrant (the "Warrant") to purchase 115,289 shares of the Company's common stock ("Common Stock") at an exercise price per share equal to the lesser of (i) 80% of the per share price of the Common Stock in the Company's contemplated Initial Offering of securities (the "Initial Offering"), (ii) $5.25 per share, (iii) the lowest daily closing price of the Common Stock during the ten days prior to the Initial Offering (subject to adjustment), (iv) the lowest daily closing price of the Common Stock during the ten days prior to the Maturity Date (subject to adjustment), (v) 80% of the unit price in the Initial Offering (if applicable), or (vi) 80% of the exercise price of any warrants issued in the Initial Offering. Additionally, pursuant to the Purchase Agreement, the Company will issue JMJ shares of Common Stock equal to 30% of the principal sum of the Note ("Origination Shares") on the 5th trading day after the pricing of the Initial Offering, but in no event later than May 30, 2017. The number of Origination Shares will equal the principal sum of the Note divided by the lowest of (i) the lowest daily closing price of the Common Stock during the ten days prior to delivery of the Origination Shares or during the ten days prior to the date of the On January 25, 2017, the Company borrowed an additional $157,895 and received a net amount of $130,500 representing the second draw against the Securities Purchase agreement with JMJ Financial. The total cash issue costs of $12,000, the original issue discount of $7,895, legal fees of $7,500 and a discount relating to the warrants of $138,000 were recorded as debt discounts and have been fully amortized as of December 31, 2017. Warrants in the amount of 30,075 were issued as per the agreement. On February 8, 2017, the Company borrowed an additional $105,263 and received a net amount of $87,000 representing the third draw against the Securities Purchase agreement with JMJ Financial. The total cash issue costs of $8,000, the original issue discount of $5,263, legal fees of $5,000 and a discount relating to the warrants of $92,000 were recorded as debt discounts and have been fully amortized as of December 31, 2017. Warrants in the amount of 20,050 were issued as per the agreement. On February 27, 2017, the Company borrowed an additional $263,158 and received a net amount of $217,500 representing the fourth draw against the Securities Purchase agreement with JMJ Financial. The total cash issue costs of $20,000, the original issue discount of $13,158, legal fees of $12,500 and a discount relating to the warrants of $230,000 were recorded as debt discounts and have been fully amortized as of December 31, 2017. Warrants in the amount of 50,138 were issued as per the agreement. On March 6, 2017, the Company borrowed an additional $157,895 and received a net amount of $130,500 representing the fifth draw against the Securities Purchase agreement with JMJ Financial. The total cash issue costs of $12,000, the original issue discount of $7,895, legal fees of $7,500 and a discount relating to the warrants of $138,000 were recorded as debt discounts and have been fully amortized as of December 31, 2017. Warrants in the amount of 30,075 were issued as per the agreement. On March 14, 2017, the Company borrowed an additional $263,158 and received a net amount of $217,500 representing the sixth draw against the Securities Purchase agreement with JMJ Financial. The total cash issue costs of $20,000, the original issue discount of $13,158, legal fees of $12,500 and a discount relating to the warrants of $230,000 were recorded as debt discounts and have been fully amortized as of December 31, 2017. Warrants in the amount of 50,138 were issued as per the agreement. On April 25, 2017, the Company borrowed an additional $78,947 and received a net amount of $65,250 representing the seventh draw against the Securities Purchase agreement with JMJ Financial. The total cash issue costs of $6,000, the original issue discount of $3,947, legal fees of $3,750 and a discount relating to the warrants of $69,000 were recorded as debt discounts and have been fully amortized as of December 31, 2017. Warrants in the amount of 15,038 were issued as per the agreement. On June 1, 2017, the Company borrowed an additional $105,263 and received a net amount of $87,000 representing the eighth draw against the Securities Purchase agreement with JMJ Financial. The total cash issue costs of $8,000, the original issue discount of $5,263, legal fees of $5,000 and a discount relating to the warrants of $92,000 were recorded as debt discounts and have been fully amortized as of December 31, 2017. Warrants in the amount of 20,050 were issued as per the agreement. On June 27, 2017, the Company borrowed an additional $105,263 and received a net amount of $87,000 representing the ninth draw against the Securities Purchase agreement with JMJ Financial. The total cash issue costs of $8,000, the original issue discount of $5,263, legal fees of $5,000 and a discount relating to the warrants of $92,000 were recorded as debt discounts and have been fully amortized as of December 31, 2017. Warrants in the amount of 20,050 were issued as per the agreement. On August 22, 2017, the Company borrowed an additional $263,158 and received a net amount of $217,500 representing the tenth draw against the Securities Purchase agreement with JMJ Financial. The total cash issue costs of $20,000, the original issue discount of $13,158, legal fees of $12,500 and a discount relating to the warrants of $230,000 were recorded as debt discounts and have been fully amortized as of December 31, 2017. Warrants in the amount of 50,125 were issued as per the agreement. Amendment to $2,500,000 Promissory Note On May 15, 2017, the Company was obligated to repay the principal due to a lender on a bridge loan totaling $1,627,632. On May 22, 2017, the Company obtained an amendment #1 to the Securities Purchase Agreement (“SPA”) and the $2,500,000 Promissory Note (“Note”). This amendment extended the original Maturity Date for the Promissory Note from May 15, 2017 to June 15, 2017 (“Extended Maturity Date”) and extended the Origination Shares issuance date in the Stock Purchase Agreement from May 30, 2017 to June 15, 2017. On July 12, 2017, the Company was obligated to repay the principal due to a lender on a bridge loan totaling $1,842,105. The Company obtained a second amendment (#2) to the Securities Purchase Agreement (“SPA”) and the $2,500,000 Promissory Note (“Note”). This amendment extended the original Maturity Date for the Promissory Note from June 15, 2017 to July 31, 2017 (“Extended Maturity Date”) and extended the Origination Shares issuance date in the Stock Purchase Agreement from May 30, 2017 to July 31, 2017. On August 14, 2017, the Company obtained a further amendment #3 to the Securities Purchase Agreement (“SPA”) and the $2,500,000 Promissory Note (“Note”). This amendment extended the original Maturity Date for the Promissory Note from July 31, 2017 to August 31, 2017 (“Extended Maturity Date”) and extended the Origination Shares issuance date in the Stock Purchase Agreement from May 30, 2017 to August 31, 2017. On August 16, 2017, the Company withdrew its registration statement for the Initial Offering that was a condition of this bridge loan and the amounts advanced under the loan agreement. The lender continued to work with the Company by granting extensions to the note. On November 14, 2017, the Company obtained a further amendment #4 to the Securities Purchase Agreement (“SPA”) and the $2,500,000 Promissory Note (“Note”). This amendment extended the original Maturity Date for the Promissory Note from August 31, 2017 to November 16, 2017 (“Extended Maturity Date”) and extended the Origination Shares issuance date in the Stock Purchase Agreement from August 31, 2017 to November 16, 2017. On November 16, 2017, the Company obtained a further amendment #5 to the Securities Purchase Agreement (“SPA”) and the $2,500,000 Promissory Note (“Note”). This amendment extended the original Maturity Date for the Promissory Note from November 16, 2017 to November 18, 2017 (“Extended Maturity Date”) and extended the Origination Shares issuance date in the Stock Purchase Agreement from November 16, 2017 to November 18, 2017. On November 20, 2017, the Company obtained a further amendment #6 to the Securities Purchase Agreement (“SPA”) and the $2,500,000 Promissory Note (“Note”). This amendment extended the original Maturity Date for the Promissory Note from November 18, 2017 to November 22, 2017 (“Extended Maturity Date”) and extended the Origination Shares issuance date in the Stock Purchase Agreement from November 18, 2017 to November 22, 2017. The Investor conditionally waived the defaults for the Company's failure to meet the original Maturity Date of the Note and delivery date for the Origination Sha |
NOTE 7 - LINE OF CREDIT
NOTE 7 - LINE OF CREDIT | 12 Months Ended |
Dec. 31, 2017 | |
Line Of Credit [Abstract] | |
NOTE 7 - LINE OF CREDIT | NOTE 7 – LINE OF CREDIT The Company assumed a line of credit with Wells Fargo Bank upon merger with ISA on April 1, 2015. The line of credit provided for borrowings up to $40,000, but is now closed to future borrowing. The balance as of December 31, 2017 and 2016, was $34,513 and $38,019, respectively, including accrued interest. This line of credit has no maturity date. The annual interest rate is the Prime Rate plus 8% (11% at December 31, 2017). The former CEO of ISA is the personal guarantor. |
NOTE 8 - CONTRACT ACCOUNTING
NOTE 8 - CONTRACT ACCOUNTING | 12 Months Ended |
Dec. 31, 2017 | |
Contractors [Abstract] | |
NOTE 8 - CONTRACT ACCOUNTING | NOTE 8 – CONTRACT ACCOUNTING Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts Costs and estimated earnings in excess of billings on uncompleted contracts represents costs and estimated earnings in excess of billings and/or cash received on uncompleted contracts accounted for under the percentage of completion contract method. At December 31, 2017 and 2016, costs and estimated earnings in excess of billings on uncompleted contracts consisted of the following: 2017 2016 Costs and estimated earnings recognized $ 1,613,731 $ 2,631,315 Less: Billings or cash received (1,189,938 ) (2,154,642 ) Costs and estimated earnings in excess of billings on uncompleted contracts $ 423,793 $ 476,673 Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts Billings in excess of costs and estimated earnings on uncompleted contracts represents billings and/or cash received that exceed accumulated revenues recognized on uncompleted contracts accounted for under the percentage of completion contract method. At December 31, 2017 and 2016, billings in excess of costs and estimated earnings on uncompleted contracts consisted of the following: 2017 2016 Billings and/or cash receipts on uncompleted contracts $ 573,847 $ 396,609 Less: Costs and estimated earnings recognized (373,437 ) (176,984 ) Billings in excess of costs and estimated earnings on uncompleted contracts $ 200,410 $ 219,625 |
NOTE 9 - DEFERRED COMPENSATION
NOTE 9 - DEFERRED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
Compensation Related Costs [Abstract] | |
NOTE 9 - DEFERRED COMPENSATION | NOTE 9 – DEFERRED COMPENSATION As of December 31, 2017 and 2016, the Company has accrued $304,203 and $894,217, respectively, of deferred compensation relating to the individual agreements, which are included in the accompanying consolidated balance sheet in accrued expenses. The above referenced deferred compensation agreements are un-funded. |
NOTE 10 - COMMITMENTS AND CONTI
NOTE 10 - COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 10 - COMMITMENTS AND CONTINGENCIES | NOTE 10 – COMMITMENTS AND CONTINGENCIES Operating Leases The Company has several non-cancelable operating leases, primarily for equipment, that expire over the next year. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease. Rental expense for operating leases during 2017 and 2016 was $12,320 and $12,457, respectively. Year Ended December 31, 2017 2016 Purchase Power $ 369 $ 588 Coffee Perks/A. Antique Coffee Services 382 300 Canon 11,569 11,569 Total Operating Leases rent expense $ 12,320 $ 12,457 The Company has an operating lease agreement, through the former parent, for office space located in Jacksonville, Florida that expired on April 30, 2016. On March 8, 2016, the former parent executed an amendment to the current lease with a start date of May 1, 2016 and ending on October 31, 2021. Rental expense for the months of March 2016 through May 2016 will be $0, followed by a monthly rent of $14,816 (including operating cost and taxes) commencing with the month of June 2016. The rent is subject to an annual escalation of 3%, beginning May 1, 2017. Minimum rent payments under this lease are recognized on a straight-line basis over the term of the lease. The current monthly lease payment is $15,260. Rental expense for the office lease during 2017 and 2016 was $174,878 and $171,513, respectively. The following is a schedule of future minimum lease payments for non-cancelable operating leases are as follows: 2018 174,568 2019 179,805 2020 185,199 2021 155,846 Total $ 695,418 Placement Agency Agreement 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 Company’s 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 Company’s 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 Company’s common stock. The warrants shall have a five-year term and an exercise price of $0.30. (see Notes 14 and 15) 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 month’s retainer. Upon signing, the Company issued to the Consultant 125,000 shares of the Company’s 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 December 31, 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 was to pay the broker $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 sent materials to qualified investors. The Company has cancelled the agreement effective December 27, 2016 and the initial fee of $6,500 was refunded to the Company on February 1, 2017. Litigation FacilityTeam Lawsuit 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 strongly believed that FacilityTeam did not deliver the products promised and felt that we would prevail in arbitration called for by the contract between the parties. Ultimately, the Company opted to settle the matter for the cost of the litigation which was estimated be at least $60,000; rather than spend further resources on defending the claim and pursuing the counterclaim against FacilityTeam. The Company agreed to pay to FacilityTeam $2,500 per month starting October 1, 2015 for 24 months and taking a charge in the third quarter of 2015 for the settlement amount of $60,000. On December 12, 2016, the Company was notified that it was in breach of settlement with a previous vendor, FacilityTeam based in Ontario, Canada alleging failure to make certain payments in accordance with such settlement. On December 28, 2016, the Company agreed to a modified payment schedule as part of a post judgement settlement for the amounts due and owing. On March 7, 2017, the final settlement payment was made by the Company to FacilityTeam. Greentree Financial Group, Inc. Lawsuit On May 12, 2016, a complaint was filed against the Company in the Circuit Court for the Seventeenth Judicial Circuit in and for Broward Country, Florida (the “Circuit Court”) by Greentree Financial Group, Inc. as plaintiff (“Greentree”). Greentree, the holder of two convertible promissory notes in the principal amount of $50,000 and $46,975 (the “Notes”), alleged that the Company was in default for failure to make scheduled principal and interest payments and failing to convert a portion of the Notes into the Company’s common stock. On May 23, 2016, we filed a counterclaim in the Circuit Court against Greentree alleging, amongst other claims, that the officers and directors of Greentree failed to disclose certain facts with respect to their past conduct, which, had the Company known, would have made it unlikely that the Company would have entered into the debt financing transaction issuing the Notes. Dispute with Former Employee On or about February 15, 2017, the Company received a Notice of Filing of Complaint of Discrimination filed by a former employee of the Company that had been terminated for insubordination. The Company received notice in late April 2017 from the Florida Commission on Human Relations with a determination of no reasonable cause exists to believe that an unlawful practice occurred. Except as disclosed above, we are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. Delinquent Payroll Taxes Payable As reported previously, the Company had a delinquent payroll tax payable at September 30, 2017 and December 31, 2016 in the amount of $1,149,189 and $400,076, respectively. As of the date hereof, the Company has paid its payroll taxes in full and the Company has appealed the IRS penalty payments for a reduction which is currently under review. In the event the Company loses its appeal for a reduction in the penalties in connection with the delinquent payroll taxes the Company would be required to pay such penalties in full. At December 31, 2017, the payroll taxes payable balance of $149,448 includes accrued late fees in the amount of $108,262. |
NOTE 11 - INCOME TAXES
NOTE 11 - INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
NOTE 11 - INCOME TAXES | NOTE 11 – INCOME TAXES The Company maintains deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The deferred tax assets at December 31, 2017 and 2016 consist of net operating loss carryforwards and differences in the book basis and tax basis of intangible assets. On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “Act”), a tax reform bill which, among other items, reduces the current federal income tax rate to 21% from 34%. The rate reduction is effective January 1, 2018 and is permanent. The Act has caused the Company’s deferred income taxes to be revalued. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through income tax expense. Pursuant to the guidance within SEC Staff Accounting Bulletin No. 118 (“SAB 118”), as of December 31, 2017, the Company recognized the provisional effects of the enactment of the Act for which measurement could be reasonably estimated. Since the Company has provided a full valuation allowance against its deferred tax assets, the revaluation of the deferred tax assets did not have a material impact on any period presented. The ultimate impact of the Act may differ from these estimates due to the Company’s continued analysis or further regulatory guidance that may be issued as a result of the Act. As a result of the reduction of the federal corporate income tax rate, the Company reduced the value of its net deferred tax asset by $2,354,257 which was recorded as a corresponding reduction to the valuation allowance during the fourth quarter of 2017. The items accounting for the difference between income taxes at the effective statutory rate and the provision for income taxes for the years ended December 31, 2017 and 2016 were as follows: Years Ended December 31, 2017 2016 Income tax benefit at U.S. statutory rate of 34% $ (1,751,842 ) $ (870,948 ) State income taxes (185,489 ) (92,218 ) Non-deductible expenses 551,235 356,674 Effect of change in federal statutory rate to 21% 490,618 — Change in valuation allowance 895,478 606,492 Total provision for income tax $ — $ — The Company’s approximate net deferred tax assets as of December 31, 2017 and 2016 were as follows: December 31, 2017 2016 Deferred Tax Assets: Net operating loss carryforward $ 4,357,876 $ 5,241,802 Intangible assets 97,103 181,338 4,454,979 5,423,140 Valuation allowance (4,454,979 ) (5,423,140 ) Net deferred tax assets $ — $ — The net operating loss carryforward was approximately $17,715,000 and $13,941,000 at December 31, 2017 and 2016, respectively. The Company provided a valuation allowance equal to the deferred income tax assets for the years ended December 31, 2017 and 2016 because it was not known whether future taxable income will be sufficient to utilize the loss carryforward and other deferred tax assets. The increase in the valuation allowance was $895,478 in 2017. The potential tax benefit arising from the loss carryforward will expire in years through 2037 The Company does not have any uncertain tax positions or events leading to uncertainty in a tax position. |
NOTE 12 - RELATED PARTIES
NOTE 12 - RELATED PARTIES | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
NOTE 12 - RELATED PARTIES | NOTE 12 – RELATED PARTIES Letter Agreements On June 9, 2017, the Company entered into a letter agreement with Mr. Gianni Arcaini, the Chief Executive Officer and a Director of the Company (the “Arcaini Letter Agreement”), whereby Mr. Arcaini agreed to convert all deferred compensation owed to him under his Employment Agreement (“Arcaini Debt Obligation”) into common stock of the Company, contingent upon the completion of the Initial Offering. The aggregate amount of $700,543 (“Arcaini Obligation”) will be owed to Mr. Arcaini under the Arcaini Debt Obligation including interest through June 30, 2017. Pursuant to the Arcaini Letter Agreement, the Arcaini Debt Obligation will automatically convert upon consummation of the Initial Offering into such number of restricted shares of the Company’s common stock calculated by dividing the Arcaini Debt Obligation by $5.00 or 140,109 shares. The Company anticipates amending the Arcaini Letter Agreement to issue Mr. Arcaini 140,109 warrants upon the consummation of the Initial Offering. Mr. Arcaini has agreed to enter into a lock-up agreement prohibiting the sale or other transfer of all securities of the Company owned by him for a period of 6 months. On August 16, 2017, the Company withdrew its registration statement on Form S-1 for the Initial Offering. Upon such withdrawal, the Arcaini Letter Agreement was terminated in accordance with the terms and conditions therein. On June 9, 2017, the Company entered into a letter agreement with Mr. Adrian Goldfarb, the Chief Financial Officer of the Company (the “Goldfarb Letter Agreement”), whereby Mr. Goldfarb agreed to convert all amounts due and owing to him under that certain promissory note issued by the Company (“Goldfarb Debt Obligation”) into common stock of the Company, contingent upon the completion of the Initial Offering. The aggregate amount of $33,620 (“Goldfarb Obligation”) will be owed to Mr. Goldfarb under the Goldfarb Debt Obligation including interest through June 30, 2017. Pursuant to the Goldfarb Letter Agreement, the Goldfarb Debt Obligation would have automatically converted upon consummation of the Initial Offering into such number of restricted shares of the Company’s common stock calculated by dividing the Goldfarb Debt Obligation by $5.00 or 6,724 shares. Mr. Goldfarb had agreed to enter into a lock-up agreement prohibiting the sale or other transfer of all securities of the Company owned by him for a period of 6 months. On August 16, 2017, the Company withdrew its registration statement on Form S-1 for the Initial Offering. Upon such withdrawal, the Goldfarb Letter Agreement was terminated in accordance with the terms and conditions therein. With the closing of the Private Offering, (i) Gianni B. Arcaini, the Chief Executive Officer, converted $700,543 of accrued salary into 700,543 shares of the Company’s common stock at a $1.00 per share and 700,543 warrants to purchase shares of common stock of the Company at an exercise price of $1.00 per share, expiring five years from the Initial Grant Date, (ii) Adrian G. Goldfarb, the Chief Financial Officer of the Company, converted $34,020 of liabilities into 34,020 shares of the Company’s common stock at a $1.00 per share and 34,020 warrants to purchase shares of common stock of the Company at an exercise price of $1.00 per share, expiring five years from the Initial Grant Date. Notes, Loans and Accounts Payable As of December 31, 2017 and 2016, there were various notes and loans payable to related parties totaling $48,215 and $577,715, respectively. The Company also has accounts payable-related parties due to an officer for expense reimbursement and due to an affiliate for services in the total amount of $12,598 and $40,136 at December 31, 2017 and 2016, respectively. (see Note 18) |
NOTE 13 - SERIES A REDEEMABLE C
NOTE 13 - SERIES A REDEEMABLE CONVERTIBLE CUMLATIVE PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2017 | |
Note 13 - Series Redeemable Convertible Cumlative Preferred Stock | |
SERIES A REDEEMABLE CONVERTIBLE CUMLATIVE PREFERRED STOCK | NOTE 13 – SERIES A REDEEMABLE CONVERTIBLE CUMLATIVE PREFERRED STOCK Our board of directors has designated 500,000 of the 10,000,000 authorized shares of preferred stock as Series A Convertible Preferred Stock. In September through October 2016, the Company sold 29,600 shares of Series A Convertible Preferred Stock for cash proceeds equal to the stated value of $296,000. Accrued cumulative dividends during 2017 was $17,760 and $5,920 during 2016. The total redeemed on November 24, 2017 was for a total of $319,680. Rank. Conversion. Liquidation Preference. Voting Rights. Dividends. Certain Adjustments. Redemption. The Series A convertible preferred stock has been reflected as temporary equity at its redemption value on the accompanying consolidated balance sheet because of its redemption feature. Additionally, in connection with the conversion and redemption portion of the Private Offering, the Company entered into Letter Agreements (the “Preferred Stock Letter Agreements”) with holders of the Company’s Series A Preferred Stock (the “Preferred Holders”) for repayment of an aggregate amount of $319,680. All Series A holders were repaid in full and no stock or warrants were issued. |
NOTE 14 - STOCKHOLDERS' EQUITY
NOTE 14 - STOCKHOLDERS' EQUITY (DEFICIT) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
NOTE 14 - STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 14 – STOCKHOLDERS’ EQUITY (DEFICIT) 2016 Equity Plan On March 11, 2016, the Board adopted the plan and the shareholders approved the plan during the annual shareholders meeting on April 21, 2016. On May 27, 2016, the Company filed a registration statement for the securities planned to be issued under the plan which became effective at that date. The 2016 Equity Incentive Plan (the “2016 Plan”) provides for the issuance of up to 228,571 shares of our common stock. The purpose of the Plan is to assist the Company in attracting and retaining key employees, directors and consultants and to provide incentives to such individuals to align their interests with those of our stockholders. (see Note 18) Administration The 2016 Plan is administered by the Compensation Committee of the Board, which currently consists of two members of the Board, each of whom is a “non-employee director” within the meaning of Rule 16b-3 promulgated under the Exchange Act and an “outside director” within the meaning of Code Section 162(m). Among other things, the compensation committee has complete discretion, subject to the express limits of the 2016 Plan, to determine the directors, employees and nonemployee consultants to be granted an award, the type of award to be granted the terms and conditions of the award, the form of payment to be made and/or the number of shares of common stock subject to each award, the exercise price of each option and base price of each stock appreciation right (“SAR”), the term of each award, the vesting schedule for an award, whether to accelerate vesting, the value of the common stock underlying the award, and the required withholding, if any. The Compensation Committee may amend, modify or terminate any outstanding award, provided that the participant’s consent to such action is required if the action would impair the participant’s rights or entitlements with respect to that award. The Compensation Committee is also authorized to construe the award agreements and may prescribe rules relating to the 2016 Plan. Notwithstanding the foregoing, the compensation committee does not have any authority to grant or modify an award under the 2016 Plan with terms or conditions that would cause the grant, vesting or exercise thereof to be considered nonqualified “deferred compensation” subject to Code Section 409A. Grant of Awards; Shares Available for Awards The 2016 Plan provides for the grant of stock options, SARs, performance share awards, performance unit awards, distribution equivalent right awards, restricted stock awards, restricted stock unit awards and unrestricted stock awards to non-employee directors, officers, employees and nonemployee consultants of the Company or its affiliates. We have reserved a total of 8 million shares of common stock for issuance as or under awards to be made under the 2016 Plan. If any award expires, is cancelled, or terminates unexercised or is forfeited, the number of shares subject thereto is again available for grant under the 2016 Plan. Currently, there are eleven identified employees (including two executive officers and directors), three non-employee directors, and up to thirty other current or future staff members who would be entitled to receive stock options and/or shares of restricted stock under the 2016 Plan. Future new hires and additional non-employee directors and/or consultants would be eligible to participate in the 2016 Plan as well. Stock Options The 2016 Plan provides for either “incentive stock options” (“ISOs”), which are intended to meet the requirements for special federal income tax treatment under the Code, or “nonqualified stock options” (“NQSOs”); the stockholders approved the 2016 Plan at the annual meeting as previously described. Stock options may be granted on such terms and conditions as the compensation committee may determine; provided, however, that the per share exercise price under a stock option may not be less than the fair market value of a share of the Company’s common stock on the date of grant and the term of the stock option may not exceed 10 years (110% of such value and five years in the case of an ISO granted to an employee who owns (or is deemed to own) more than 10% of the total combined voting power of all classes of capital stock of our company or a parent or subsidiary of our company). ISOs may only be granted to employees. In addition, the aggregate fair market value of our common stock covered by one or more ISOs (determined at the time of grant) which are exercisable for the first time by an employee during any calendar year may not exceed $100,000. Any excess is treated as a NQSO. Stock Appreciation Rights A SAR entitles the participant, upon exercise, to receive an amount, in cash or stock or a combination thereof, equal to the increase in the fair market value of the underlying common stock between the date of grant and the date of exercise. SARs may be granted in tandem with, or independently of, stock options granted under the 2016 Plan. A SAR granted in tandem with a stock option (i) is exercisable only at such times, and to the extent, that the related stock option is exercisable in accordance with the procedure for exercise of the related stock option; (ii) terminates upon termination or exercise of the related stock option (likewise, the common stock option granted in tandem with a SAR terminates upon exercise of the SAR); (iii) is transferable only with the related stock option; and (iv) if the related stock option is an ISO, may be exercised only when the value of the stock subject to the stock option exceeds the exercise price of the stock option. A SAR that is not granted in tandem with a stock option is exercisable at such times as the compensation committee may specify. Performance Shares and Performance Unit Awards Performance share and performance unit awards entitle the participant to receive cash or shares of our common stock upon the attainment of specified performance goals. In the case of performance units, the right to acquire the units is denominated in cash values. Restricted Stock Awards and Restricted Stock Unit Awards A restricted stock award is a grant or sale of common stock to the participant, subject to our right to repurchase all or part of the shares at their purchase price (or to require forfeiture of such shares if issued to the participant at no cost) in the event that conditions specified by the compensation committee in the award are not satisfied prior to the end of the time period during which the shares subject to the award may be repurchased by or forfeited to us. Our restricted stock unit entitles the participant to receive a cash payment equal to the fair market value of a share of common stock for each restricted stock unit subject to such restricted stock unit award, if the participant satisfies the applicable vesting requirement. Unrestricted Stock Awards An unrestricted stock award is a grant or sale of shares of our common stock to the participant that is not subject to transfer, forfeiture or other restrictions, in consideration for past services rendered to the Company or an affiliate or for other valid consideration. Amendment and Termination The compensation committee may adopt, amend and rescind rules relating to the administration of the 2016 Plan, and amend, suspend or terminate the 2016 Plan, but no such amendment or termination will be made that materially and adversely impairs the rights of any participant with respect to any award received thereby under the 2016 Plan without the participant’s consent, other than amendments that are necessary to permit the granting of awards in compliance with applicable laws. We have attempted to structure the 2016 Plan so that remuneration attributable to stock options and other awards will not be subject to the deduction limitation contained in Code Section 162(m). Series B Convertible Preferred Stock The following summary of certain terms and provisions of our Series B Convertible Preferred Stock (the “Series B Preferred”) is subject to, and qualified in its entirety by reference to, the terms and provisions set forth in our certificate of designation of preferences, rights and limitations of Series B Convertible Preferred Stock (the “Series B Preferred Certificate of Designation”) as previously filed. Subject to the limitations prescribed by our articles of incorporation, our board of directors is authorized to establish the number of shares constituting each series of preferred stock and to fix the designations, powers, preferences and rights of the shares of each of those series and the qualifications, limitations and restrictions of each of those series, all without any further vote or action by our stockholders. Our board of directors has designated 15,000 of the 10,000,000 authorized shares of preferred stock as Series B Convertible Preferred Stock. When issued, the shares of Series B Convertible Preferred Stock will be validly issued, fully paid and non-assessable. Each share of Series B Convertible Preferred Stock is convertible at any time at the holder’s option into a number of shares of common stock equal to $1,000 divided by the conversion price of $0.50 per share. Notwithstanding the foregoing, we shall not effect any conversion of Series B Convertible Preferred Stock, with certain exceptions, to the extent that, after giving effect to an attempted conversion, the holder of shares of Series B Convertible Preferred Stock (together with such holder’s affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own a number of shares of our common stock in excess of 4.99%(or, at the election of the purchaser, 9.99%) of the shares of our common stock then outstanding after giving effect to such exercise. Effective November 24, 2017 (the “Effective Date”), the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) and a Registration Rights Agreement (the “Registration Rights Agreement”) which included the issuance of 2,830 shares of Series B Convertible Preferred Stock worth $2,830,000 (including the conversion of liabilities at a price of $1,000 per Class B Unit. As of the date hereof, there are 2,830 shares of Series B Convertible Preferred Stock issued and outstanding. Common stock issued Effective November 24, 2017 (the “Effective Date”), the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) and a Registration Rights Agreement (the “Registration Rights Agreement”) with 57 investors (the “Purchasers”). Pursuant to the Securities Purchase Agreement, the Purchasers purchased 16,402,742 shares of common stock, 22,062,742 purchaser warrants (the “Purchaser Warrants”), and 2,830 shares of Series B Convertible Preferred Stock (collectively, the “SPA Securities”) worth $11,031,371 (including the conversion of liabilities and redemptions of shares of Series A Preferred Stock) at a price of $0.50 per Class A Unit (as defined in the Securities Purchase Agreement) and $1,000 per Class B Unit (as defined in the Securities Purchase Agreement) (the “Private Offering”). The Purchaser Warrants have a strike price of $0.65, expiring five years from the Initial Exercise Date (as defined in the Purchaser Warrants). The Securities Purchase Agreement contains customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. Additionally, the Purchasers may participate in a subsequent offering of the Company’s securities in an aggregate amount of up to 35% of the subsequent offering on the twenty-fourth (24th) month anniversary of the Private Offering. In connection with the Private Offering, as of the date hereof, there are 18,756,180 shares of common stock issued and outstanding, 2,830 shares of Series B Convertible Preferred Stock issued and outstanding and 25,122,454 common stock purchase warrants issued and outstanding. 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 Company’s 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 Company’s common stock valued at $273,600 based on the quoted trading price of $0.30 per share as of the execution date of this agreement. In addition, the Company has issued warrants for the purchase of 302,000 shares of the Company’s common stock. The warrants have a five-year term and an exercise price of $0.30. The Company had accrued $60,000 during 2016 which was unpaid and was recorded in accrued expenses on the Company’s consolidated balance sheet. In December 2016, the Company terminated the agreement and the accrued expenses of $60,000 was reversed and the 302,000 warrants were cancelled. As these warrants were fully vested at the date of grant, the Company has charged $90,036 to consulting expense. 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 operating expense. The Company issued 403,977 shares of common stock for consulting services rendered valued at the quoted trading price on the respective grant dates resulting in consulting expense of $50,000 in the year ended December 31, 2016. On May 13, 2016, the Company issued 125,000 shares of common stock for consulting services valued at the quoted trading price on the grant date resulting in prepaid consulting expense of $27,400 and was amortized over the three-month agreement term. During the first quarter of 2017, the Company issued 2,903 shares of common stock for services valued at the quoted trading price on respective grant dates resulting in a consulting expense of $15,000. The Company issued 6,747 shares of common stock during the third quarter of 2017 for services valued at the quoted trading price on respective grant dates resulting in a consulting expense of $25,000. These shares were issued in November 2017. The Company issued 350,000 shares of common stock on November 24, 2017 for legal fees in the amount of $175,000. Treasury Stock In August 2016, the Company’s Board of Directors approved a new class of Preferred Stock, “Series A” (see Note 13). For shareholders who invested in previous private placements, the Company was 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 December 31, 2017, and 2016, four of the company’s shareholders sold 114,793 of their common shares back to the Company in exchange for Series A preferred stock valued at $148,000. Stock Issuance Costs In November 2017, the Company recorded the placement agents closing fees in addition to legal costs associated with the capital raise in the amount of $1,454,610. Conversion of Debt In connection with the conversion and redemption portion of the Private Offering, on the Effective Date, the Company entered into that certain Agreement to Convert Promissory Note (the “JMJ Letter Agreement”) with JMJ Financial, a sole proprietorship (“JMJ”), whereby JMJ agreed to convert $2,105,263 of liabilities and their additional investment of $1,000,000, into 2,830 Series B Convertible Preferred Shares and 550,526 shares of Common Stock for a total equivalent of 6,210,526 shares of common stock of the Company at a conversion price equal to $0.50 per share. Additionally, JMJ was issued warrants to purchase 6,210,526 shares of the Company’s common stock at an exercise price equal to $0.65 per share, expiring five years from the Initial Exercise Date. Commencing on the Effective Date, JMJ entered into a Lock-Up Agreement for a period of 365 days prohibiting the sale or other transfer of all securities of the Company owned by JMJ. Additionally, in connection with the conversion and redemption portion of the Private Offering, the Company entered into Letter Agreements (the “Debt Letter Agreements”) with certain debt holders (the “Debt Holders”) for conversion of an additional aggregate amount of $945,524. The debt holders were converted into 1,741,637 shares of common stock of the Company at a conversion price equal to $0.50 per share. Additionally, the debt holders, which were converted, were issued warrants to purchase 1,741,637 shares of the Company’s common stock at an exercise price equal to $0.65 per share, expiring five years from the Initial Exercise Date. Simultaneously with the closing of the Private Offering, (i) Gianni B. Arcaini, the Chief Executive Officer, converted $700,543 of accrued salary into 700,543 shares of the Company’s common stock at a $1.00 per share and 700,543 warrants to purchase shares of common stock of the Company at an exercise price of $1.00 per share, expiring five years from the Initial Exercise Date, (ii) Adrian G. Goldfarb, the Chief Financial Officer of the Company, converted $34,020 of liabilities into 34,020 shares of the Company’s common stock at a $1.00 per share and 34,020 warrants to purchase shares of common stock of the Company at an exercise price of $1.00 per share, expiring five years from the Initial Exercise Date, (iii) a shareholder who is indirectly invested in the Company with the CEO through another entity, converted $118,875 of liabilities into 118,875 shares of the Company’s common stock at a $1.00 per share and 118,875 warrants to purchase shares of common stock of the Company at an exercise price of $1.00 per share, expiring five years from the Initial Exercise Date. These shares were valued at $0.50 per share based on the recent sales of common stock from a Private Offering, generating a $426,719 gain on extinguishment of debt, however, as these are considered related parties, the gain is recorded to APIC. |
NOTE 15 - COMMON STOCK PURCHASE
NOTE 15 - COMMON STOCK PURCHASE WARRANTS | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
NOTE 15 - COMMON STOCK PURCHASE WARRANTS | NOTE 15 – COMMON STOCK PURCHASE WARRANTS Warrants 2017 During the first quarter of 2017, 194,888 warrants were issued with the Securities Purchase Agreement and the amended Placement Agent Agreement. During the same period, 375 warrants expired. During the second quarter of 2017, 59,548 warrants were issued with the Securities Purchase Agreement and the amended Placement Agent Agreement. During the third quarter of 2017, 54,122 warrants were issued with the Securities Purchase Agreement and the amended Placement Agent Agreement. During the fourth quarter of 2017, 14,464,000 warrants were issued with the Securities Purchase Agreement and the amended Placement Agent Agreement, 8,452,180 warrants were issued for debt/services and 2,206,274 warrants were issued to the Placement Agent. During the same period, 433,069 warrants were cancelled. 2016 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. 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 additional paid in capital and will be amortized to interest expense over the term of the debt. On April 1, 2016, the Company issued three-year warrants for 200,000 common shares with an exercise price of $0.40 to the placement agent as additional compensation for arrangement of financing through the Securities Purchase Agreement. 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. 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. In the second quarter of 2016, 3,750 warrants expired. During 2016, an additional 4,659,893 warrants were issued with the Securities Purchase Agreements and the amended Placement Agent Agreements. In December of 2016, 302,000 warrants were cancelled. Number of Warrants Weighted Avg. Exercise Price Remaining Contractual Life (Years) Outstanding at December 31, 2015 17,410 $ 18.90 4.5 Warrants expired, forfeited or cancelled (8,779 ) 14.35 Warrants issued with debt, debt modifications or services 210,283 8.05 4.6 Warrants exchanged for common stock (150 ) 233.45 Outstanding at December 31, 2016 218,764 8.4 4.6 Warrants expired, forfeited or cancelled (433,444 ) 233.45 Warrants issued with debt, debt modifications or services 10,967,012 .65 4.6 Warrants issued for common stock 14,464,000 Outstanding at December 31, 2017 25,216,332 .65 4.9 Exercisable at end of period 25,216,332 $ .65 4.9 |
NOTE 16 - DERIVATIVE FINANCIAL
NOTE 16 - DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Note 16 - Derivative Financial Instruments | |
NOTE 16 - DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 16 – DERIVATIVE FINANCIAL INSTRUMENTS The Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under which convertible instruments and warrants, which contain terms that protect holders from declines in the stock price (reset provisions), may not be exempt from derivative accounting treatment. As a result, the warrants are initially recorded as a liability at fair value and are revalued at fair value at each reporting date in 2017, including the period ending December 31, 2016. As of November 2017, the company issued 433,069 warrants in connection with a debt financing of $2,105,263. The warrants were for a five-year term and were exercisable initially at $5.25 per share and carried a re-pricing feature in the event that the stock price declined prior to repayment of the underlying debt instrument. These warrants were cancelled as agreed with the investor as part of the Private Offering. The Company calculated the estimated fair values of the liabilities for warrant derivative instruments at December 31, 2016 and at the warrant issuance date of December 20, 2016 with the Black Scholes Pricing Model (“BSM”) option pricing model and Monte Carlo simulations using the closing price of the Company’s common stock of $0.038 and the ranges for volatility, expected term and risk-free interest indicated below that follows (BSM inputs only). The Monte Carlo simulations were used to determine a range of expected volatilities and the implied volatility used was determined with a correlation to the highest probability results from that simulation. Thus, for the year ended December 31, 2016, the Company recognized a loss from the change in derivative liability of $264,099 in warrant derivative gain (loss) related to the warrant derivative instruments. The Company calculated the estimated fair values of the liabilities for warrant derivative instruments at March 31, June 30 , BSM Inputs Warrants During the period ending December 31, 2017 During the period ending December 31, 2016 Expected Volatility 37% to 144% 144% Expected Remaining Term 4.07 years to 5.00 years 4.97 years Risk Free Interest Rate 1.80% to 2.13% 2.04% |
NOTE 17 - FAIR VALUE MEASUREMEN
NOTE 17 - FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Note 17 - Fair Value Measurements | |
NOTE 17 - FAIR VALUE MEASUREMENTS | NOTE 17 – FAIR VALUE MEASUREMENTS We currently measure and report at fair value the liability for warrant derivative instruments. The fair value liabilities for price adjustable warrants have been recorded as determined utilizing the BSM option pricing model and Monte Carlo simulations. The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016: Balance at December 31, 2016 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Liabilities: Fair value of liability for warrant derivative instruments $ 793,099 $ — $ — $ 793,099 Balance at December 31, 2017 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Liabilities: Fair value of liability for warrant derivative instruments $ — $ — $ — $ — The following is a roll forward through December 31, 2017 of the fair value liability of warrant derivative instruments: Fair Value of Liability for Warrant Derivative Instruments Balance at December 31, 2015 $ — Initial fair value of warrant liability included in expense ($217,980) and debt discount ($529,000) 746,980 Change in fair value included in other (income) expense 46,119 Balance at December 31, 2016 793,099 Initial fair value of warrant liability 2,046,347 Gain on change in fair value included in Other Income and Expense (2,743,686 ) Balance at final valuation and written off to Additional Paid In Capital (95,760 ) Balance at December 31, 2017 $ — |
NOTE 18 - SUBSEQUENT EVENTS
NOTE 18 - SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
NOTE 18 - SUBSEQUENT EVENTS | NOTE 18 – SUBSEQUENT EVENTS On January 5, 2018, the Company made final payment in the amount of $48,215 to repay the related party note to the Company’s CEO. (see Note 12) On January 18, 2018, the Company held an annual shareholders meeting where the shareholders approved the number of authorized shares pursuant to the Company’s 2016 Equity Incentive Plan in the amount of 2,500,000 (the “Plan”). On March 8, the Board of Directors approved the issuance of 2,443,333 stock options with a strike price of $1 per share to management and certain employees. Effective April 1, 2018, the Company re-approved the Incentive Stock Option Plan (“ISO”) and has been adjusted to reflect the reverse split and the current equity raise. (see Note 14) |
NOTE 1 - NATURE OF OPERATIONS26
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operartions | 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.” duostech’s IP is built upon two of its core technology platforms (praes i ® i ® The Company’s strategy includes expansion of its technology base through organic development efforts, strategic partnerships, and growth through strategic acquisitions. duostech’s 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. ISA’s 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. |
Reclassifications | Reclassification Certain amounts in the 2016 balance sheet have been reclassified from notes payable related parties - current to notes payable related parties - long-term to conform to the 2017 presentation. This reclassification caused notes payable related parties – long-term in 2016 to be increased by $48,231 and notes payable related parties – current to be decreased by the same amount. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All share and per share amounts have been presented to give retroactive effect to a 1 for 35 reverse stock split that occurred in May 2017. |
Principled of Consolidation | Principles of Consolidation The 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 intangible and other long-lived assets, estimates of percentage completion on projects and related revenues, valuation of stock-based compensation, valuation of derivatives, valuation of warrants issued with debt, valuation of beneficial conversion features in convertible debt, and valuation of stock-based awards. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents For the purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be a cash equivalent. There were no cash equivalents at December 31, 2017 or 2016. |
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. As of December 31, 2017, balance in one financial institution exceeded federally insured limits by $1,724,594. There were no amounts on deposit in excess of federally insured limits at December 31, 2016. Significant Customers and Concentration of Credit Risk Major Customers and Accounts Receivable The Company had certain customers whose revenue individually represented 10% or more of the CompanyÂ’s total revenue, or whose accounts receivable balances individually represented 10% or more of the CompanyÂ’s total accounts receivable, as follows: Geographic Concentration Approximately 4.35% and 20.89% of revenue in 2017 and 2016, respectively, is generated from customers outside of the United States. |
Accounting for Derivatives | Accounting for Derivatives The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. |
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 and cash equivalents, accounts receivable, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short maturities. Amounts recorded for notes payable, net of discount, and loans payable also approximate fair value because current interest rates available to us for debt with similar terms and maturities are substantially the same. We follow accounting guidance for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs, other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at estimated net realizable value. Accounts receivable are comprised of balances due from customers net of estimated allowances for uncollectible accounts. In determining the collections on the account, historical trends are evaluated and specific customer issues are reviewed to arrive at appropriate allowances. The Company reviews its accounts to estimate losses resulting from the inability of its customers to make required payments. Any required allowance is based on specific analysis of past due accounts and also considers historical trends of write-offs. Past due status is based on how recently payments have been received from customers. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost, less accumulated depreciation. Depreciation is provided by the straight-line method over the estimated economic life of the property and equipment (three to five years). When assets are sold or retired, their costs and accumulated depreciation are eliminated from the accounts and any gain or loss resulting from their disposal is included in the statement of operations. Leasehold improvements are expensed over the shorter of the term of our lease or their useful lives. |
Software Development Costs | Software Development Costs The Company accounts for costs incurred to develop or purchase computer software for internal use in accordance with FASB ASC 350-40 “Internal-Use Software” or ASC 350-50 "Website Costs". Costs incurred during the preliminary project stage along with post-implementation stages of internal use computer software are expensed as incurred. Costs incurred to maintain existing product offerings are expensed as incurred. |
Patents and Trademarks | Patents and Trademarks Patents and trademarks which are stated at amortized cost, relate to the development of video surveillance security system technology and are being amortized over 17 years. |
Long-Lived Assets | Long-Lived Assets The Company evaluates the recoverability of its property, equipment, and other long-lived assets in accordance with FASB ASC 360-10-35-15 “Impairment or Disposal of Long-Lived Assets”, which requires recognition of impairment of long-lived assets in the event the net book value of such assets exceed the estimated future undiscounted cash flows attributable to such assets or the business to which such intangible assets relate. This guidance requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Accrual of Legal Costs Associated with Loss Contingencies | Accrual of Legal Costs Associated with Loss Contingencies The Company expenses legal costs associated with loss contingencies, as incurred. |
Product Warranties | Product Warranties The Company has a 90 day warranty period for materials and labor after final acceptance of all projects. If any parts are defective they are replaced under our vendor warranty which is usually 12-36 months. Final acceptance terms vary by customer. Some customers have a cure period for any material deviation and if the Company fails or is unable to correct any deviations, a full refund of all payments made by the customer will be arranged by the Company. As of December 31, 2017 and 2016, management considers all final acceptance terms have been met; therefore no accrual of warranty reserves has been made. |
Loan Costs | Loan Costs Loan costs paid to lenders or third-parties are recorded as debt discounts to the related loans and amortized to interest expense over the loan term. |
Sales Returns Liabilities | Sales Returns Liabilities Our systems are sold as integrated systems and there are no sales returns allowed. |
Revenue Recognition | Revenue Recognition Project Revenue The Company constructs intelligent technology systems consisting of materials and labor under customer contracts. Revenues and related costs on project revenue are recognized using the “percentage of completion method” of accounting in accordance with ASC 606-10-55-20, “Construction-Type and Production-Type Contracts”. Under this method, contract revenues are recognized over the performance period of the contract in direct proportion to the costs incurred as a percentage of total estimated costs for the entirety of the contract. Costs include direct material, direct labor, subcontract labor and other allocable indirect costs. All un-allocable indirect costs and corporate general and administrative costs are also charged to the periods as incurred. Any recognized revenues that have not been billed to a customer are recorded as an asset in “costs and estimated earnings in excess of billings on uncompleted contracts”. Any billings of customers in excess of recognized revenues are recorded as a liability in “billings in excess of costs and estimated earnings on uncompleted contracts”. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. A contract is considered complete when all costs except insignificant items have been incurred and the installation is operating according to specifications or has been accepted by the customer. The Company has contracts in various stages of completion. Such contracts require estimates to determine the appropriate cost and revenue recognition. Costs estimates are reviewed periodically on a contract-by-contract basis throughout the life of the contract such that adjustments to the profit resulting from revisions are made cumulative to the date of the revision. Significant management judgments and estimates, including the estimated costs to complete projects, must be made and used in connection with the revenue recognized in the accounting period. Current estimates may be revised as additional information becomes available. Maintenance and Technical Support Maintenance and technical support services are provided on both an as-needed and extended-term basis and may include providing both parts and labor. Maintenance and technical support provided outside of a maintenance contract are on an as-requested basis, and revenue is recognized as the services are provided. Revenue for maintenance and technical support provided on an extended-term basis is recognized ratably over the term of the contract. For sales arrangements that do not involve multiple elements such as professional services, which are of short-term duration, revenues are recognized when services are completed. IT Asset Management Services The Company recognizes revenue from its IT asset management business in accordance with the Securities and Exchange Commission (the “SEC”) Staff Accounting Bulletin No. 104, "Revenue Recognition" and Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 985-605-25 which addresses Revenue Recognition for the software industry. The general criteria for revenue recognition under ASC 985-605 for our Company, which sells software licenses, which do not require any significant modification or customization, is that revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. The Company’s IT asset management business generates revenues from three sources: (1) Professional Services (consulting and auditing); (2) Software licensing with optional hardware sales and (3) Customer Service (training and maintenance support). For sales arrangements that do not involve multiple elements: (1) Revenues for professional services, which are of short-term duration, are recognized when services are completed; (2) For all periods reflected in this report, software license sales have been one-time sales of a perpetual license to use our software product and the customer also has the option to purchase third party manufactured handheld devices from us if they purchase our software license. Accordingly, the revenue is recognized upon delivery of the software and delivery of the hardware, as applicable, to the customer; (3) Training sales are one-time upfront short-term training sessions and are recognized after the service has been performed; and (4) Maintenance/support is an optional product sold to our software license customers under one-year contracts. Accordingly, maintenance payments received upfront are deferred and recognized over the contract term. Multiple Elements Arrangements with customers may involve multiple elements including project revenue and maintenance services in our Intelligent Technology Systems business. Maintenance will occur after the project is completed and may be provided on an extended-term basis or on an as-needed basis. In our IT Asset Management business, multiple elements may include any of the above four sources. Training and maintenance on software products may occur after the software product sale while other services may occur before or after the software product sale and may not relate to the software product. Revenue recognition for multiple element arrangement is as follows: Each element is accounted for separately when each element has value to the customer on a standalone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price of the items when sold separately. Once the selling price is allocated, the revenue for each element is recognized using the applicable criteria under GAAP as discussed above for elements sold in non-multiple element arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company sells its various services and software and hardware products at established prices on a standalone basis which provides Company specific objective evidence of selling price for purposes of multiple element relative selling price allocation. The Company only sells maintenance services or spare parts based on its established rates after it has completed a system integration project for a customer. The customer is not required to purchase maintenance services. All elements in multiple element arrangements with Company customers qualify as separate units of account for revenue recognition purposes. |
Deferred Revenue | Deferred Revenue Deferred revenues represent billings or cash received in excess of revenue recognizable on service agreements that are not accounted for under the percentage of completion method. |
Advertising | Advertising The Company expenses the cost of advertising. During the years ended December 31, 2017 and 2016, there were no advertising costs. |
Share-Based Compensation | Share-Based Compensation Stock-based compensation is accounted for in accordance with the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the shorter of the period the employee or director is required to perform the services in exchange for the award or the vesting period. The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date”. The expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with the Financial Accounting Standards Board FASB Accounting Standards Codification (“ASC”) 740, Income Taxes, which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company evaluates all significant tax positions as required by ASC 740. As of December 31, 2017, the Company does not believe that it has taken any positions that would require the recording of any additional tax liability nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next year. Any penalties and interest assessed by income taxing authorities are included in operating expenses. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. Tax years 2015, 2016 and 2017 remain open for potential audit. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings per share (EPS) are computed by dividing net loss applicable to common stock by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss applicable to common stock 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, convertible preferred stock or other common stock equivalents. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. At December 31, 2017 and 2016, there were an aggregate of 25,216,332 and 710,238 outstanding warrants to purchase shares of common stock respectively; 0 and 122,707 shares of common stock issuable upon conversion of convertible debt respectively; and at December 31, 2017, 5,660,000 common shares were issuable upon conversion of Series B convertible preferred stock, all of which were excluded from the computation of dilutive earnings per share because their inclusion would have been anti-dilutive. |
Segment Information | Segment Information The Company operates in one reportable segment. |
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 has adopted to this standard for their fiscal year beginning January 1, 2018 and it will not 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 3 - ACCOUNTS RECEIVABLE (T
NOTE 3 - ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable were as follows at December 31, 2017 and 2016: 2017 2016 Accounts receivable $ 298,304 $ 256,989 Allowance for doubtful accounts — — $ 298,304 $ 256,989 |
NOTE 4 - PROPERTY AND EQUIPME28
NOTE 4 - PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Major classes of property and equipment | The major classes of property and equipment are as follow at December 31, 2017 and 2016: 2017 2016 Furniture, fixtures and equipment $ 862,582 $ 1,136,003 Less: Accumulated depreciation (797,220 ) (1,069,512 ) $ 65,362 $ 66,491 |
NOTE 5 - PATENTS AND TRADEMAR29
NOTE 5 - PATENTS AND TRADEMARKS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Patents and trademarks | 2017 2016 Patents and trademarks $ 267,205 $ 267,205 Less: Accumulated amortization (221,227 ) (215,782 ) $ 45,978 $ 51,423 |
NOTE 6 - DEBT (Tables)
NOTE 6 - DEBT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable - Financing Agreements | The Company’s notes payable relating to financing agreements classified as current liabilities consist of the following as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Notes Payable Principal Interest Principal Interest Third Party - Insurance Note 1 $ 25,075 10.30 % $ 25,075 9.75 % Third Party - Insurance Note 2 11,679 10.00 % 9,861 10.00 % Third Party - Insurance Note 3 — 8.05 % — 8.05 % Third Party - Insurance Note 4 12,903 9.24 % 11,432 9.24 % Total $ 49,657 $ 46,368 |
Notes Payable - Related Parties | The Company’s notes payable to related parties classified as current liabilities consist of the following as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Notes Payable Principal Interest Principal Interest Shareholder $ — 9 % $ 65,000 9 % Related party — 8 % 13,369 8 % Related party — — 10,504 — Related party — 8 % 56,500 8 % Related Party — — 3,170 — Related Party — 8 % 8,431 8 % CFO — 8 % 31,973 — Shareholder — 6 % 226,936 6 % CEO 9,078 8 % 8,383 — Shareholder — 8 % 105,219 — Sub-total current portion 9,078 529,485 Add long-term portion-CEO 39,137 48,231 Total $ 48,215 $ 577,716 |
Notes Payable | Notes Payable December 31, 2017 December 31, 2016 Payable To Principal Interest Principal Interest Shareholder $ — — $ 19,108 — Vendor — — 22,500 — Total $ — $ 41,608 |
Convertible Notes Payable-Net of Discounts, Including Premiums | Convertible Notes, Including Premiums December 31, 2017 December 31, 2016 Payable To Principal Premium Principal, Including Premium Principal Premium Principal, Including Premium Vendor $ — $ — $ — $ 50,000 $ 50,000 $ 100,000 Vendor — — — 46,975 46,975 93,950 Total $ — $ — $ — $ 96,975 $ 96,975 $ 193,950 |
Notes Payable - Third Parties | Notes Payable – Third Parties December 31, 2017 December 31, 2016 Payable To Principal Less Unamortized Discounts Principal, Less Unamortized Discounts Principal Less Unamortized Discounts Principal, Less Unamortized Discounts Note 1-non-current $ — $ — $ — $ 1,800,000 $ 593,478 $ 1,206,522 Note 2-current — — — 605,263 559,661 45,602 Total $ — $ — $ — $ 2,405,263 $ 1,153,139 $ 1,252,124 |
NOTE 8 - CONTRACT ACCOUNTING (T
NOTE 8 - CONTRACT ACCOUNTING (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Contractors [Abstract] | |
Schedule of contract billings | Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts Costs and estimated earnings in excess of billings on uncompleted contracts represents costs and estimated earnings in excess of billings and/or cash received on uncompleted contracts accounted for under the percentage of completion contract method. At December 31, 2017 and 2016, costs and estimated earnings in excess of billings on uncompleted contracts consisted of the following: 2017 2016 Costs and estimated earnings recognized $ 1,613,731 $ 2,631,315 Less: Billings or cash received (1,189,938 ) (2,154,642 ) Costs and estimated earnings in excess of billings on uncompleted contracts $ 423,793 $ 476,673 Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts Billings in excess of costs and estimated earnings on uncompleted contracts represents billings and/or cash received that exceed accumulated revenues recognized on uncompleted contracts accounted for under the percentage of completion contract method. At December 31, 2017 and 2016, billings in excess of costs and estimated earnings on uncompleted contracts consisted of the following: 2017 2016 Billings and/or cash receipts on uncompleted contracts $ 573,847 $ 396,609 Less: Costs and estimated earnings recognized (373,437 ) (176,984 ) Billings in excess of costs and estimated earnings on uncompleted contracts $ 200,410 $ 219,625 |
NOTE 10 - COMMITMENTS AND CON32
NOTE 10 - COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating leases | Year Ended December 31, 2017 2016 Purchase Power $ 369 $ 588 Coffee Perks/A. Antique Coffee Services 382 300 Canon 11,569 11,569 Total Operating Leases rent expense $ 12,320 $ 12,457 |
Future minimum lease payments for non-cancelable operating leases | The following is a schedule of future minimum lease payments for non-cancelable operating leases are as follows: 2018 174,568 2019 179,805 2020 185,199 2021 155,846 Total $ 695,418 |
NOTE 11 - INCOME TAXES (Tables)
NOTE 11 - INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Difference between income taxes at effective statutory rate and provision for income taxes | The items accounting for the difference between income taxes at the effective statutory rate and the provision for income taxes for the years ended December 31, 2017 and 2016 were as follows: Years Ended December 31, 2017 2016 Income tax benefit at U.S. statutory rate of 34% $ (1,751,842 ) $ (870,948 ) State income taxes (185,489 ) (92,218 ) Non-deductible expenses 551,235 356,674 Effect of change in federal statutory rate to 21% 490,618 — Change in valuation allowance 895,478 606,492 Total provision for income tax $ — $ — |
Net deferred tax assets | The Company’s approximate net deferred tax assets as of December 31, 2017 and 2016 were as follows: December 31, 2017 2016 Deferred Tax Assets: Net operating loss carryforward $ 4,357,876 $ 5,241,802 Intangible assets 97,103 181,338 4,454,979 5,423,140 Valuation allowance (4,454,979 ) (5,423,140 ) Net deferred tax assets $ — $ — |
NOTE 15 - COMMON STOCK PURCHA34
NOTE 15 - COMMON STOCK PURCHASE WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Warrants | Number of Warrants Weighted Avg. Exercise Price Remaining Contractual Life (Years) Outstanding at December 31, 2015 17,410 $ 18.90 4.5 Warrants expired, forfeited or cancelled (8,779 ) 14.35 Warrants issued with debt, debt modifications or services 210,283 8.05 4.6 Warrants exchanged for common stock (150 ) 233.45 Outstanding at December 31, 2016 218,764 8.4 4.6 Warrants expired, forfeited or cancelled (433,444 ) 233.45 Warrants issued with debt, debt modifications or services 10,967,012 .65 4.6 Warrants issued for common stock 14,464,000 Outstanding at December 31, 2017 25,216,332 .65 4.9 Exercisable at end of period 25,216,332 $ .65 4.9 |
NOTE 16 - DERIVATIVE FINANCIA35
NOTE 16 - DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Note 16 - Derivative Financial Instruments Tables | |
Estimated fair values of the liabilities for warrant derivative | BSM Inputs Warrants During the period ending December 31, 2017 During the period ending December 31, 2016 Expected Volatility 37% to 144% 144% Expected Remaining Term 4.07 years to 5.00 years 4.97 years Risk Free Interest Rate 1.80% to 2.13% 2.04% |
NOTE 17 - FAIR VALUE MEASUREM36
NOTE 17 - FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Note 17 - Fair Value Measurements Tables | |
Summary of financial assets and liabilities measured at fair value on a recurring basis | The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016: Balance at December 31, 2016 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Liabilities: Fair value of liability for warrant derivative instruments $ 793,099 $ — $ — $ 793,099 Balance at December 31, 2017 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Liabilities: Fair value of liability for warrant derivative instruments $ — $ — $ — $ — |
Fair value liability of warrant derivative instruments | The following is a roll forward through December 31, 2017 of the fair value liability of warrant derivative instruments: Fair Value of Liability for Warrant Derivative Instruments Balance at December 31, 2015 $ — Initial fair value of warrant liability included in expense ($217,980) and debt discount ($529,000) 746,980 Change in fair value included in other (income) expense 46,119 Balance at December 31, 2016 793,099 Initial fair value of warrant liability 2,046,347 Gain on change in fair value included in Other Income and Expense (2,743,686 ) Balance at final valuation and written off to Additional Paid In Capital (95,760 ) Balance at December 31, 2017 $ — |
NOTE 1 - NATURE OF OPERATIONS,
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFCANT ACCTG POLICIES (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | Outside of United States [Member] | ||
Concentration of Credit Risk | 4.35% | 20.89% |
Customer A [Member] | Revenue | ||
Concentration of Credit Risk | 22.00% | 21.00% |
Customer A [Member] | Accounts Receivable | ||
Concentration of Credit Risk | 42.00% | 50.00% |
Customer B [Member] | Revenue | ||
Concentration of Credit Risk | 20.00% | 19.00% |
Customer B [Member] | Accounts Receivable | ||
Concentration of Credit Risk | 17.00% | 26.00% |
Customer C [Member] | Revenue | ||
Concentration of Credit Risk | 18.00% | 16.00% |
Customer C [Member] | Accounts Receivable | ||
Concentration of Credit Risk | 13.00% | 14.00% |
Customer D [Member] | Revenue | ||
Concentration of Credit Risk | 11.00% | |
Customer D [Member] | Accounts Receivable | ||
Concentration of Credit Risk | 11.00% |
NOTE 1 - NATURE OF OPERATIONS38
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFCANT ACCTG POLICIES (Narratives) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Warrants Outstanding | 25,216,332 | 710,238 |
Number of Shares upon Conversion | 0 | 122,707 |
Product warranty Period | 90 days | |
Increase to notes payable from related parties, non-current portion, due to reclassification adjustment | $ 48,231 | |
Balance at financial institution | $ 1,724,594 | |
Patents and Trademarks [Member] | ||
Estimated economic life of the property and equipment | 17 years | |
Minimum [Member] | ||
Estimated economic life of the property and equipment | 3 years | |
Product warranty Period | 12 months | |
Maximum [Member] | ||
Estimated economic life of the property and equipment | 5 years | |
Product warranty Period | 36 months | |
Series A Preferred Stock [Member] | ||
Number of Shares upon Conversion | 5,660,000 |
NOTE 2 - GOING CONCERN (Narrati
NOTE 2 - GOING CONCERN (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Nov. 24, 2017 | |
Going Concern [Abstract] | |||
Net Loss | $ 5,152,477 | ||
Net cash used in operations | 3,562,306 | $ 1,840,290 | |
Accumulated deficit | 28,688,946 | $ 23,518,709 | |
Aggregate principal amount Promissory Note | $ 11,031,371 | ||
Long-term debt and payables | $ 108,262 | 108,262 | |
Working capital to fund additional resources | $ 2,000,000 |
NOTE 3 - ACCOUNTS RECEIVABLE (D
NOTE 3 - ACCOUNTS RECEIVABLE (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Accounts receivable | $ 298,304 | $ 256,989 |
Allowance for doubtful accounts | ||
Accounts Receivable, Net | $ 298,304 | $ 256,989 |
NOTE 3 - ACCOUNTS RECEIVABLE (N
NOTE 3 - ACCOUNTS RECEIVABLE (Narrative) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Receivable due from Affiliate and Related Bad Debt | $ 0 | $ 70,248 |
NOTE 4 - PROPERTY AND EQUIPME42
NOTE 4 - PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Abstract] | ||
Furniture, fixtures and equipment | $ 862,582 | $ 1,136,003 |
Less: Accumulated depreciation | (797,220) | (1,069,512) |
Furniture, fixtures and equipment, Net | $ 65,362 | $ 66,491 |
NOTE 4 - PROPERTY AND EQUIPME43
NOTE 4 - PROPERTY AND EQUIPMENT (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Disposal of fixed assets | $ 315,129 | |
Depreciation | $ 42,838 | $ 41,398 |
NOTE 5 - PATENTS AND TRADEMAR44
NOTE 5 - PATENTS AND TRADEMARKS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents and trademarks | $ 267,205 | $ 267,205 |
Less: Accumulated amortization | (221,227) | (215,782) |
Patents and trademarks, Net | 45,978 | 51,423 |
Amortization of patents | $ 5,445 | $ 5,653 |
NOTE 6 - DEBT (Schedule of Note
NOTE 6 - DEBT (Schedule of Notes Payable - Financing Agreements) (Details) - USD ($) | Dec. 31, 2017 | Dec. 23, 2017 | Sep. 30, 2017 | Feb. 03, 2017 | Dec. 31, 2016 | Dec. 23, 2016 | Sep. 15, 2016 | Apr. 02, 2016 | Feb. 03, 2016 | Dec. 31, 2015 |
Notes Payable, Principal | $ 49,657 | $ 46,368 | ||||||||
Third Party - Insurance Note 1 [Member] | ||||||||||
Notes Payable, Principal | $ 25,075 | $ 25,075 | $ 25,075 | $ 25,075 | ||||||
Notes Payable, Interest | 10.30% | 9.75% | ||||||||
Third Party - Insurance Note 2 [Member] | ||||||||||
Notes Payable, Principal | $ 11,679 | $ 19,065 | $ 9,861 | $ 19,065 | ||||||
Notes Payable, Interest | 10.00% | 10.00% | ||||||||
Third Party - Insurance Note 3 [Member] | ||||||||||
Notes Payable, Principal | $ 127,620 | $ 123,571 | ||||||||
Notes Payable, Interest | 8.05% | 8.05% | ||||||||
Third Party - Insurance Note 4 [Member] | ||||||||||
Notes Payable, Principal | $ 12,903 | $ 11,432 | $ 65,000 | |||||||
Notes Payable, Interest | 9.24% | 9.24% |
NOTE 6 - DEBT (Schedule of No46
NOTE 6 - DEBT (Schedule of Notes Payable - Related Parties) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Sub-total current portion | $ 9,078 | $ 529,485 |
Add long-term portion-CEO | 39,137 | 48,231 |
Notes Payable - Related Parties, Principal Amount | 48,215 | 577,716 |
Shareholder [Member] | ||
Sub-total current portion | $ 65,000 | |
Notes Payable - Related Parties, Interest Rate | 9.00% | 9.00% |
Related Party [Member] | ||
Sub-total current portion | $ 13,369 | |
Notes Payable - Related Parties, Interest Rate | 8.00% | 8.00% |
Related Party [Member] | ||
Sub-total current portion | $ 10,504 | |
Notes Payable - Related Parties, Interest Rate | ||
Related Party [Member] | ||
Sub-total current portion | $ 56,500 | |
Notes Payable - Related Parties, Interest Rate | 8.00% | 8.00% |
Related Party [Member] | ||
Sub-total current portion | $ 3,170 | |
Notes Payable - Related Parties, Interest Rate | ||
Related Party [Member] | ||
Sub-total current portion | $ 8,431 | |
Notes Payable - Related Parties, Interest Rate | 8.00% | 8.00% |
Mr. Adrian Goldfarb [Member] | ||
Sub-total current portion | $ 31,973 | |
Notes Payable - Related Parties, Interest Rate | 8.00% | |
Shareholder [Member] | ||
Sub-total current portion | $ 226,936 | |
Notes Payable - Related Parties, Interest Rate | 6.00% | 6.00% |
Chief Executive Officer [Member] | ||
Sub-total current portion | $ 9,078 | $ 8,383 |
Notes Payable - Related Parties, Interest Rate | 8.00% | |
Shareholder [Member] | ||
Sub-total current portion | $ 105,219 | |
Notes Payable - Related Parties, Interest Rate | 8.00% |
NOTE 6 - DEBT (Schedule of No47
NOTE 6 - DEBT (Schedule of Notes Payable - Net of Discounts) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Notes Payable-Net of Discounts, Principal Amount | $ 41,608 | |
Shareholder [Member] | ||
Notes Payable-Net of Discounts, Principal Amount | $ 19,108 | |
Notes Payable-Net of Discounts, Interest | ||
Vendor [Member] | ||
Notes Payable-Net of Discounts, Principal Amount | $ 22,500 | |
Notes Payable-Net of Discounts, Interest |
NOTE 6 - DEBT (Schedule of Conv
NOTE 6 - DEBT (Schedule of Convertible Notes Payable) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Convertible Notes Payable, Principal Amount | $ 96,975 | |
Convertible Notes Payable, Premium | 96,975 | |
Principal, net of Discount Including Premium | 193,950 | |
Vendor [Member] | ||
Convertible Notes Payable, Principal Amount | 50,000 | |
Convertible Notes Payable, Premium | 50,000 | |
Principal, net of Discount Including Premium | 100,000 | |
Vendor [Member] | ||
Convertible Notes Payable, Principal Amount | 46,975 | |
Convertible Notes Payable, Premium | 46,975 | |
Principal, net of Discount Including Premium | $ 93,950 |
NOTE 6 - DEBT (Schedule of No49
NOTE 6 - DEBT (Schedule of Notes Payable - Third Party) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Principal, Less Unamortized Discounts | $ 41,608 | |
Note 1-non-current [Member] | ||
Principal Amount | 1,800,000 | |
Less unamortized discounts | 593,478 | |
Principal, Less Unamortized Discounts | 1,206,522 | |
Note 2-current [Member] | ||
Principal Amount | 605,263 | |
Less unamortized discounts | 559,661 | |
Principal, Less Unamortized Discounts | 45,602 | |
Third Party [Member] | ||
Principal Amount | 2,405,263 | |
Less unamortized discounts | 1,153,139 | |
Principal, Less Unamortized Discounts | $ 1,252,124 |
NOTE 6 - DEBT (Narrative) (Deta
NOTE 6 - DEBT (Narrative) (Details) - USD ($) | Feb. 15, 2018 | Jan. 05, 2018 | Nov. 27, 2017 | Nov. 24, 2017 | Nov. 20, 2017 | Nov. 16, 2017 | Nov. 14, 2017 | Aug. 14, 2017 | Aug. 01, 2017 | Jul. 12, 2017 | Jun. 02, 2017 | May 15, 2017 | Mar. 14, 2017 | Mar. 06, 2017 | Feb. 08, 2017 | Feb. 03, 2017 | Dec. 03, 2016 | Aug. 11, 2016 | Apr. 02, 2016 | Jan. 11, 2016 | Aug. 10, 2015 | Apr. 08, 2015 | Mar. 03, 2015 | Dec. 12, 2013 | Oct. 23, 2017 | Aug. 22, 2017 | Jun. 30, 2017 | Jun. 27, 2017 | Apr. 25, 2017 | Feb. 27, 2017 | Feb. 02, 2017 | Jan. 25, 2017 | Dec. 20, 2016 | Jul. 19, 2016 | Mar. 31, 2016 | Jan. 28, 2016 | Jan. 24, 2016 | Nov. 30, 2015 | Sep. 30, 2015 | Jan. 29, 2015 | Mar. 31, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 23, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 23, 2016 | Sep. 15, 2016 | Jun. 30, 2016 | Apr. 30, 2016 | Feb. 03, 2016 | Dec. 31, 2015 | Dec. 30, 2015 | Dec. 16, 2015 | Oct. 27, 2015 | Oct. 26, 2015 | Apr. 02, 2015 | May 28, 2008 |
Amount of borrowing | $ 2,047,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | 49,657 | 46,368 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain loss on settlement | 426,719 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument amount | $ 11,031,371 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest payment | $ 3,230 | $ 126,975 | $ 245,134 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion price | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior secured and warrant exercisable securities, shares | 200,000 | 59,548 | 14,464,000 | 4,659,893 | 54,122 | 194,888 | 2,500,000 | 14,963 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.40 | $ 0.001 | $ 0.35 | $ 0.001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of the warrants | $ 390,799 | $ 390,799 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants issued to placement agent | 25,216,332 | 710,238 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total amount due to shareholder | $ 12,598 | $ 40,136 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Legel fees | 175,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of convertible debt | $ 947,266 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series B Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion price | $ 0.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock conversion | 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion price | $ 0.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expiration period | 5 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.65 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of convertible debt | $ 212,077 | $ 500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount of monthly interest payment required to be paid on convertible debt through maturity date | $ 63,633 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bridge Loan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument amount | $ 2,500,000 | $ 2,500,000 | $ 2,500,000 | $ 2,500,000 | $ 2,500,000 | $ 2,500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payment obligation | $ 1,842,105 | $ 1,627,632 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Nov. 22, 2017 | Nov. 18, 2017 | Nov. 16, 2017 | Aug. 31, 2017 | Jul. 31, 2017 | Jun. 15, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Placement Agent [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expiration period | 3 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants issued to placement agent | 5,715 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payment to placement agent | $ 142,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Strike price | $ 14 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CW Electric [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | $ 8,032 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remitted amount out of proceeds in final settlement | 558,032 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Agreed settlement amount | 550,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Driginal Issue Discount (OID) promissory note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 1,535 | $ 4,282 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 18.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 15,000 | 13,369 | $ 15,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Dec. 15, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | $ 2,651 | 802 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly interest rate | 8.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 17,651 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Two promissory notes [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | 275,660 | 275,660 | 0 | 10,504 | $ 212,693 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss on conversion | $ 115,139 | $ 115,139 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly interest rate | 30.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares exchanged in debt | 1,002,401 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TrueVue360, Inc. [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 2,100 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 1.50% | 1.50% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 28,040 | $ 28,040 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | $ 9,777 | $ 9,777 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly interest rate | 0.00% | 0.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 37,817 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.28 | $ 0.28 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants issued to placement agent | 501,201 | 501,201 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wife of CEO [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 56,500 | 0 | 56,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | 11,575 | 0 | 7,474 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from loan | $ 5,000 | $ 10,000 | $ 20,000 | $ 9,500 | $ 12,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate principal amount of note | 68,075 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Former CEO of ISA [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | 0 | 3,170 | $ 30,378 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OID promissory note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 968 | $ 2,700 | 11,131 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 30.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 10,000 | 8,431 | $ 10,593 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Dec. 15, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | $ 1,131 | 506 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest payment | $ 1,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly interest rate | 8.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholder [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | 0 | 226,936 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | 7,078 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount paid | 125,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total amount due to shareholder | 132,078 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related party loan from CEO [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 1,052 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 7.99% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 59,925 | 48,215 | 56,614 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from loan | 60,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fees on loan proceeds | $ 75 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related party principal shareholder [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | 105,219 | 0 | 105,219 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Feb. 11, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | 11,608 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from loan | $ 111,645 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate principal amount of note | 116,827 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrelated party investor [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 19,108 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 19,108 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock conversion | 38,216 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion price | $ 0.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Facility Team of Ontario [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 2,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | 0 | 22,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement amount | $ 60,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vendor [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | 50,000 | $ 50,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement amount | 150,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain loss on settlement | 64,647 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | $ 7,511 | 4,723 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly interest rate | 1.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 1.50% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 44,325 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Purchase Agreement [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 93,950 | $ 93,950 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement amount | $ 150,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | 12,682 | 2,650 | 4,228 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premium | 46,975 | $ 46,975 | 46,975 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Private Placement [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 1,800,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | $ 30,263 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of original issue discount | 5.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior secured and warrant exercisable securities, shares | 71,249 | 71,249 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expiration period | 5 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ 12.25 | $ 12.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of the warrants | $ 466,031 | $ 466,031 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest rate | 14.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional accrued interest rate | 2.00% | 2.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Postponement payment | $ 5,000 | $ 5,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Placement agents fees | $ 28,750 | 137,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total debt funding | $ 1,800,000 | $ 1,800,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants issued to placement agent | 9,224 | 5,715 | 5,715 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants issued to placement agent, fair value | $ 43,272 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payment of additional obligations at closing | 690,110 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from placement agreement | $ 529,000 | 1,518,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt issuance expenses | 40,000 | $ 40,000 | $ 20,000 | $ 30,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | 90,000 | $ 90,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payment to placement agent | 50,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Legel fees | 10,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total cash issue costs | $ 192,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash clsoing expenses | $ 46,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
JMJ Financial [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount of borrowing | $ 105,263 | $ 263,158 | $ 157,895 | $ 105,263 | $ 263,158 | $ 105,263 | $ 78,947 | $ 263,158 | $ 157,895 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net amount received | 87,000 | 217,500 | 130,500 | 87,000 | 263,158 | 87,000 | 65,250 | 263,158 | 130,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 5.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 2,500,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock conversion | 550,526 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion price | $ 0.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | 5,263 | 13,158 | 7,895 | 5,263 | 13,158 | 5,263 | 3,947 | 13,158 | 7,895 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.65 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants issued to placement agent, fair value | 115,289 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Legel fees | 5,000 | 12,500 | 7,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total cash issue costs | 8,000 | 20,000 | 12,000 | 8,000 | 20,000 | 8,000 | 6,000 | 20,000 | 12,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt discounts | 92,000 | 230,000 | 138,000 | 92,000 | 230,000 | 92,000 | 69,000 | 230,000 | 138,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant Value issued | $ 20,050 | $ 50,138 | $ 30,075 | $ 20,050 | $ 50,125 | $ 20,050 | $ 15,038 | $ 50,138 | $ 30,075 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of convertible debt | $ 2,105,263 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Initial principal amount | 605,263 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consideration amount | $ 2,350,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of per share price to pubic offering | 80.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional investment | $ 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
JMJ Financial [Member] | Series B Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock conversion | 2,830 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion price | $ 1,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expiration period | 5 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
JMJ Financial [Member] | Warrant [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock conversion | 6,210,526 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Private Offering [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 65,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | 53,875 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate principal amount of note | 118,875 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Private Offering One[Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | 13,369 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | 1,817 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate principal amount of note | 15,186 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Private Offering Two[Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | 8,431 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | 1,145 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 9,576 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chief Executive Officer [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 9.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 65,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | 49,231 | 43,381 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Adrian Goldfarb [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 0 | 31,973 | $ 8,783 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | 4,020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principal balance of convertible debenture | 30,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly interest rate | 8.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 30,000 | $ 365 | $ 34,040 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock conversion | 34,040 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repayments of debt | $ 1,307 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related party principal shareholder [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 6.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Oct. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | 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% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | 226,936 | $ 320,166 | $ 320,166 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest balance | 12,684 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate principal amount of note | $ 239,620 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repayments of debt | $ 27,007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from loan | $ 48,215 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third Party - Insurance Note 1 [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 2,234 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 10.30% | 9.75% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 25,075 | 25,075 | $ 25,075 | $ 25,075 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third Party - Insurance Note 2 [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 1,702 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 10.00% | 10.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | 11,679 | 9,861 | $ 19,065 | $ 19,065 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third Party - Insurance Note 2 [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 1,581 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third Party - Insurance Note 3 [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 13,252 | $ 12,818 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 8.05% | 8.05% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 127,620 | $ 123,571 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third Party - Insurance Note 4 [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 5,782 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 9.24% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 65,000 | $ 12,903 | $ 11,432 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third Party - Insurance Note 4 [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly installments of principal and interest | $ 49,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable outstanding balance | $ 4,373 |
NOTE 7 - LINE OF CREDIT (Narrat
NOTE 7 - LINE OF CREDIT (Narrative) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 02, 2015 |
Line of Credit - Wells Fargo Bank | $ 34,513 | $ 38,019 | $ 40,000 |
Interest Rate | 11.00% | ||
Prime Rate [Member] | |||
Interest Rate | 8.00% |
NOTE 8 - CONTRACT ACCOUNTING (S
NOTE 8 - CONTRACT ACCOUNTING (Schedule of costs and estimated earnings) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Contractors [Abstract] | ||
Costs and estimated earnings recognized | $ 1,613,731 | $ 2,631,315 |
Less: Billings or cash received | (1,189,938) | (2,154,642) |
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 423,793 | $ 476,673 |
NOTE 8 - CONTRACT ACCOUNTING 53
NOTE 8 - CONTRACT ACCOUNTING (Schedule of billings in excess of costs and estimated earnings) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Contractors [Abstract] | ||
Billings and/or cash receipts on uncompleted contracts | $ 573,847 | $ 396,609 |
Less: Costs and estimated earnings recognized | (373,437) | (176,984) |
Billings in excess of costs and estimated earnings on uncompleted contracts | $ 200,410 | $ 219,625 |
NOTE 9 - DEFERRED COMPENSATION
NOTE 9 - DEFERRED COMPENSATION (Narrative) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Compensation Related Costs [Abstract] | ||
Accrued deferred compensation | $ 304,203 | $ 894,217 |
NOTE 10 - COMMITMENTS AND CON55
NOTE 10 - COMMITMENTS AND CONTINGENCIES (Schedule of Rent Expense) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
May 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Total Operating Leases rent expense | $ 0 | $ 12,320 | $ 12,457 |
Purchase Power [Member] | |||
Total Operating Leases rent expense | 369 | 588 | |
Coffee Perks/A. Antique Coffee Services [Member] | |||
Total Operating Leases rent expense | 382 | 300 | |
Canon [Member] | |||
Total Operating Leases rent expense | $ 11,569 | $ 11,569 |
NOTE 10 - COMMITMENTS AND CON56
NOTE 10 - COMMITMENTS AND CONTINGENCIES (Schedule of Future Minimum Lease Payments) (Details) | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 174,568 |
2,019 | 179,805 |
2,020 | 185,199 |
2,021 | 155,846 |
Total | $ 695,418 |
NOTE 10 - COMMITMENTS AND CON57
NOTE 10 - COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) | Feb. 02, 2017 | Sep. 02, 2016 | May 13, 2016 | May 05, 2016 | Jan. 06, 2016 | Jan. 23, 2017 | Jun. 30, 2016 | Jan. 27, 2016 | May 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 24, 2017 | Sep. 30, 2017 | May 01, 2017 | Apr. 30, 2016 | Apr. 02, 2016 | Mar. 28, 2016 | Jun. 30, 2015 | Mar. 31, 2015 |
Rental expense | $ 0 | $ 12,320 | $ 12,457 | |||||||||||||||||
Monthly Rental expense including operation cost and taxes | $ 14,816 | |||||||||||||||||||
Percentage fo annual escalation | 3.00% | |||||||||||||||||||
Delinquent payroll tax payable | $ 400,076 | $ 1,149,189 | ||||||||||||||||||
Agent percentage of cash fee | 7.00% | |||||||||||||||||||
Strike price | $ 0.001 | $ 0.001 | $ 0.35 | $ 0.40 | ||||||||||||||||
Term of agreement | 3 months | |||||||||||||||||||
Monthly payroll installment agreement amount | $ 25,000 | |||||||||||||||||||
Prepaid Assets amortized expenses | 393,531 | $ 306,458 | ||||||||||||||||||
Initial agreement amount with broker | $ 50,000 | |||||||||||||||||||
Payment to broker | $ 6,500 | |||||||||||||||||||
Refund of initial fees | $ 6,500 | |||||||||||||||||||
Payroll taxes payable | 149,448 | 444,476 | ||||||||||||||||||
Long-term debt and payables | 108,262 | $ 108,262 | ||||||||||||||||||
Jacksonville, Florida [Member] | ||||||||||||||||||||
Rental expense | 174,878 | $ 171,513 | ||||||||||||||||||
Monthly lease payment | $ 15,260 | |||||||||||||||||||
Convertible Notes Payable [Member] | ||||||||||||||||||||
Convertible notes | $ 46,975 | $ 50,000 | ||||||||||||||||||
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 | |||||||||||||||||||
Consultant [Member] | ||||||||||||||||||||
Term of agreement | 6 months | |||||||||||||||||||
Financing from third party through consultant | $ 1,500,000 | |||||||||||||||||||
Equity to third party | $ 90,000 | |||||||||||||||||||
Restricted common stock granted to consultant | 20,000 | 125,000 | ||||||||||||||||||
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 | |||||||||||||||||||
Monthly payroll installment agreement amount | $ 3,000 | |||||||||||||||||||
Restricted common stock granted to consultant, amount | $ 100 | |||||||||||||||||||
Prepaid Assets | $ 27,400 | |||||||||||||||||||
Prepaid Assets amortized period | 3 months | |||||||||||||||||||
Prepaid Assets amortized expenses | $ 27,400 | |||||||||||||||||||
Facility Team [Member] | ||||||||||||||||||||
Settlement amount | $ 60,000 | |||||||||||||||||||
Greentree Financial Group, Inc [Member] | ||||||||||||||||||||
Settlement amount | $ 150,000 |
NOTE 11 - INCOME TAXES (Schedul
NOTE 11 - INCOME TAXES (Schedule of provision for income taxes) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit at U.S. statutory rate of 34% | $ (1,751,842) | $ (870,948) |
State income taxes | (185,489) | (92,218) |
Non-deductible expenses | 551,235 | 356,674 |
Effect of change in federal statutory rate to 21% | 490,618 | |
Change in valuation allowance | 895,478 | 606,492 |
Total provision for income tax |
NOTE 11 - INCOME TAXES (Sched59
NOTE 11 - INCOME TAXES (Schedule of deferred tax assets) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 4,357,876 | $ 5,241,802 |
Intangible assets | 97,103 | 181,338 |
Gross deferred tax assets | 4,454,979 | 5,423,140 |
Valuation allowance | (4,454,979) | (5,423,140) |
Net deferred tax assets |
NOTE 11 - INCOME TAXES (Narrati
NOTE 11 - INCOME TAXES (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Net operating loss carry forward | $ 17,715,000 | $ 17,715,000 | $ 13,941,000 |
Increase in the valuation allowance | 1,328,836 | 1,328,836 | |
Increase (decrease) in tax asset valuation allowance | $ (2,354,257) | $ 895,478 | |
Statutory rate | 34.00% | ||
Percentage of Federal and State tax rate loss before taxes | 37.60% | ||
Income tax rate effective 2018 | 21.00% |
NOTE 12 - RELATED PARTIES (Narr
NOTE 12 - RELATED PARTIES (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | ||
Notes and loans payable to related parties | $ 48,215 | $ 577,716 |
Due to the former parent | 12,598 | $ 40,136 |
Chief Executive Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Amount owed to related party from conversion of deferred compensation into common stock | $ 700,543 | |
Warrants to be issued to related party upon consumation of Offering | 700,543 | |
Mr. Adrian Goldfarb [Member] | ||
Related Party Transaction [Line Items] | ||
Amount owed to related party from conversion of deferred compensation into common stock | $ 34,020 | |
Warrants to be issued to related party upon consumation of Offering | 34,020 | |
June 2017 Arcaini Letter Agreement [Member] | Chief Executive Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Amount owed to related party from conversion of deferred compensation into common stock | $ 700,543 | |
Warrants to be issued to related party upon consumation of Offering | 140,109 | |
Termination date of Letter Agreement with related party | Aug. 16, 2017 | |
June 2017 Goldfarb Letter Agreement [Member] | Mr. Adrian Goldfarb [Member] | ||
Related Party Transaction [Line Items] | ||
Amount owed to related party from conversion of deferred compensation into common stock | $ 33,620 | |
Warrants to be issued to related party upon consumation of Offering | 6,724 | |
Termination date of Letter Agreement with related party | Aug. 16, 2017 | |
October 2017 Arcaini Letter Agreement [Member] | Chief Executive Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Amount owed to related party from conversion of deferred compensation into common stock | $ 700,543 | |
Warrants to be issued to related party upon consumation of Offering | 700,543 | |
October 2017 Goldfarb Letter Agreement [Member] | Mr. Adrian Goldfarb [Member] | ||
Related Party Transaction [Line Items] | ||
Amount owed to related party from conversion of deferred compensation into common stock | $ 34,020 | |
Warrants to be issued to related party upon consumation of Offering | 34,020 |
NOTE 13 - SERIES A REDEEMABLE62
NOTE 13 - SERIES A REDEEMABLE CONVERTIBLE CUMLATIVE PREFERRED STOCK (Details) - USD ($) | 2 Months Ended | 12 Months Ended | ||||||||
Oct. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 24, 2017 | Jan. 11, 2016 | Dec. 31, 2015 | Dec. 30, 2015 | Dec. 16, 2015 | Oct. 27, 2015 | Oct. 26, 2015 | |
Preferred stock authorized | 10,000,000 | 10,000,000 | ||||||||
Proceeds from sale of preferred stock | $ 296,000 | |||||||||
Accrued cumulative dividends | $ 17,760 | $ 5,920 | ||||||||
Preferred stock redemption value | $ 319,680 | |||||||||
Accrued and unpaid dividends per share by the conversion price | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | ||||
Series A Convertible Preferred Stock [Member] | ||||||||||
Preferred stock authorized | 10,000,000 | |||||||||
Preferred stock issued | 500,000 | |||||||||
Sale of preferred stock | $ 29,600 | |||||||||
Proceeds from sale of preferred stock | $ 296,000 | |||||||||
Liquidation preference | $ 10 | |||||||||
Accrued and unpaid dividends per share by the conversion price | $ 0.18 | |||||||||
Cumulative cash dividends at an annual rate | 8.00% |
NOTE 14 - STOCKHOLDERS' EQUIT63
NOTE 14 - STOCKHOLDERS' EQUITY (DEFICIT) (Narrative) (Details) - USD ($) | Nov. 24, 2017 | Feb. 08, 2017 | May 13, 2016 | Mar. 11, 2016 | Jan. 06, 2016 | Feb. 27, 2017 | Jan. 25, 2017 | Dec. 20, 2016 | Jan. 22, 2016 | Dec. 30, 2015 | Dec. 16, 2015 | Oct. 27, 2015 | Oct. 26, 2015 | Sep. 30, 2015 | Sep. 21, 2015 | Sep. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 27, 2017 | Jun. 30, 2017 | Apr. 30, 2016 | Apr. 02, 2016 | Jan. 11, 2016 | Aug. 27, 2015 | Dec. 31, 2014 |
Preferred stock authorized | 10,000,000 | 10,000,000 | ||||||||||||||||||||||||||
Issuance of common stock | 350,000 | 125,000 | 403,977 | 166,667 | 229,167 | 499,308 | 68,223 | 1,002,401 | 506,421 | 46,015 | 50,000 | |||||||||||||||||
Value of assets and liabilities acquired | $ 1,580,163 | |||||||||||||||||||||||||||
Incurred acquisition costs | $ 75,489 | $ 36,718 | ||||||||||||||||||||||||||
Issuance of common stock in exchange for convertible note and accrued interest | 166,667 | |||||||||||||||||||||||||||
Issuance of common stock in exchange for convertible note and accrued interest, amount | $ 50,000 | $ 68,750 | $ 149,792 | $ 20,467 | $ 275,660 | $ 81,250 | $ 50,000 | |||||||||||||||||||||
Conversion price | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | ||||||||||||||||||||||
Settlement of an outstanding payable | 136,734 | |||||||||||||||||||||||||||
Exercise price | $ 0.001 | $ 0.001 | $ 0.35 | $ 0.40 | ||||||||||||||||||||||||
Gain (Loss) on Settlement | $ 35,876 | $ 5,479 | $ 115,139 | $ 55,484 | ||||||||||||||||||||||||
Exchange of Common stock into Warrants | 501,201 | 20,250 | ||||||||||||||||||||||||||
Principal balance of a promissory note | $ 37,817 | |||||||||||||||||||||||||||
Quoted trading price | $ 0.2155 | |||||||||||||||||||||||||||
Amount of Consulting Agreement | $ 100 | |||||||||||||||||||||||||||
Consuting Expense | $ 27,400 | $ 25,000 | $ 15,000 | $ 15,000 | $ 50,000 | $ 10,675 | ||||||||||||||||||||||
Warrant Granted | 54,122 | 194,888 | 14,963 | 14,464,000 | 4,659,893 | 59,548 | 2,500,000 | 200,000 | ||||||||||||||||||||
Shares Value | 260,624 | $ 64,778 | $ 20,658 | $ 1,892 | ||||||||||||||||||||||||
Warrant valued | 130,175 | |||||||||||||||||||||||||||
Total value of warrants | $ 390,799 | |||||||||||||||||||||||||||
Total value of Common Share | $ 50,000 | $ 68,750 | $ 144,473 | $ 35,616 | ||||||||||||||||||||||||
Term of agreement | 3 months | |||||||||||||||||||||||||||
Common stock issued in exchange of warrants | 2,100 | |||||||||||||||||||||||||||
Warrants exchanged | 5,250 | 5,250 | ||||||||||||||||||||||||||
Loss on settlement charged to operations | $ 630 | $ 630 | ||||||||||||||||||||||||||
Common stock sold | $ 5,777,390 | |||||||||||||||||||||||||||
Common stock, shares issued | 18,756,180 | 20,657,850 | 20,657,850 | |||||||||||||||||||||||||
Common stock, shares outstanding | 18,756,180 | 1,892,020 | 1,892,020 | |||||||||||||||||||||||||
Common stock issued for services, shares | 6,747 | 2,903 | ||||||||||||||||||||||||||
Legel fees | $ 175,000 | |||||||||||||||||||||||||||
Stock issuance costs | $ 1,454,610 | $ 1,454,610 | ||||||||||||||||||||||||||
Conversion of convertible debt | 947,266 | |||||||||||||||||||||||||||
Gain on extinguishment of debt | $ 426,719 | |||||||||||||||||||||||||||
Debt Holders [Member] | ||||||||||||||||||||||||||||
Conversion price | $ 0.50 | |||||||||||||||||||||||||||
Conversion of convertible debt | $ 945,524 | |||||||||||||||||||||||||||
Common stock conversion | 1,741,637 | |||||||||||||||||||||||||||
Professional Fees [Member] | ||||||||||||||||||||||||||||
Incurred acquisition costs | 31,812 | 16,425 | ||||||||||||||||||||||||||
Salaries, Wages and Contract Labor [Member] | ||||||||||||||||||||||||||||
Incurred acquisition costs | 35,000 | 10,000 | ||||||||||||||||||||||||||
General and Administrative Expenses [Member] | ||||||||||||||||||||||||||||
Incurred acquisition costs | $ 8,677 | $ 10,293 | ||||||||||||||||||||||||||
Agreement with Investment Banker [Member] | ||||||||||||||||||||||||||||
Issuance of common stock in exchange for convertible note and accrued interest, amount | $ 60,000 | |||||||||||||||||||||||||||
Exercise price | $ 0.30 | |||||||||||||||||||||||||||
Consuting Expense | $ 90,036 | |||||||||||||||||||||||||||
Shares Value | 273,600 | |||||||||||||||||||||||||||
General financial advisory and investment banking services per month | $ 10,000 | |||||||||||||||||||||||||||
Percentage payable on last day of month following closing | 50.00% | |||||||||||||||||||||||||||
Term of agreement | 6 months | |||||||||||||||||||||||||||
Shares issued to investment banker, vested shares | 912,000 | |||||||||||||||||||||||||||
Warrants issued to purchase common stock | 302,000 | |||||||||||||||||||||||||||
Expiration period | 5 years | |||||||||||||||||||||||||||
JMJ Financial [Member] | ||||||||||||||||||||||||||||
Conversion price | $ 0.50 | |||||||||||||||||||||||||||
Exercise price | $ 0.65 | |||||||||||||||||||||||||||
Legel fees | $ 5,000 | $ 12,500 | $ 7,500 | |||||||||||||||||||||||||
Conversion of convertible debt | $ 2,105,263 | |||||||||||||||||||||||||||
Additional investment | $ 1,000,000 | |||||||||||||||||||||||||||
Common stock conversion | 550,526 | |||||||||||||||||||||||||||
Aggregate principal amount of note | $ 2,500,000 | |||||||||||||||||||||||||||
Chief Executive Officer [Member] | ||||||||||||||||||||||||||||
Exercise price | $ 1 | |||||||||||||||||||||||||||
Expiration period | 5 years | |||||||||||||||||||||||||||
Amount owed to related party from conversion of deferred compensation into common stock | $ 700,543 | |||||||||||||||||||||||||||
Warrants to be issued to related party upon consumation of Offering | 700,543 | |||||||||||||||||||||||||||
Chief Executive Officer [Member] | Investor [Member] | ||||||||||||||||||||||||||||
Exercise price | $ 1 | |||||||||||||||||||||||||||
Amount owed to related party from conversion of deferred compensation into common stock | $ 118,875 | |||||||||||||||||||||||||||
Warrants to be issued to related party upon consumation of Offering | 118,875 | |||||||||||||||||||||||||||
Mr. Adrian Goldfarb [Member] | ||||||||||||||||||||||||||||
Exercise price | $ 1 | |||||||||||||||||||||||||||
Expiration period | 5 years | |||||||||||||||||||||||||||
Amount owed to related party from conversion of deferred compensation into common stock | $ 34,020 | |||||||||||||||||||||||||||
Warrants to be issued to related party upon consumation of Offering | 34,020 | |||||||||||||||||||||||||||
Employee Stock Option [Member] | ||||||||||||||||||||||||||||
Voting rights | more than 10% of the total combined voting power of all classes of capital stock | |||||||||||||||||||||||||||
Aggregate fair market value of our common stock not exceed | $ 100,000 | |||||||||||||||||||||||||||
2016 Equity Incentive Plan [Member] | ||||||||||||||||||||||||||||
Issuance of common stock | 228,571 | |||||||||||||||||||||||||||
Issuance of Common stock under Awards | 228,571 | |||||||||||||||||||||||||||
Common stock on the date of grant, term of the stock option | not exceed 10 years | |||||||||||||||||||||||||||
SPA [Member] | ||||||||||||||||||||||||||||
Issuance of Common stock under Awards | 16,402,742 | |||||||||||||||||||||||||||
Conversion price | $ 0.50 | |||||||||||||||||||||||||||
Shares Value | $ 11,031,371 | |||||||||||||||||||||||||||
Strike price | $ 0.65 | |||||||||||||||||||||||||||
Percentage of subsequent offering | 30.00% | |||||||||||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||||||||||
Common stock, shares issued | 25,122,454 | |||||||||||||||||||||||||||
Common stock, shares outstanding | 25,122,454 | |||||||||||||||||||||||||||
Warrant [Member] | Debt Holders [Member] | ||||||||||||||||||||||||||||
Exercise price | $ 0.65 | |||||||||||||||||||||||||||
Expiration period | 5 years | |||||||||||||||||||||||||||
Common stock conversion | 1,741,637 | |||||||||||||||||||||||||||
Warrant [Member] | JMJ Financial [Member] | ||||||||||||||||||||||||||||
Common stock conversion | 6,210,526 | |||||||||||||||||||||||||||
Warrant [Member] | Chief Executive Officer [Member] | ||||||||||||||||||||||||||||
Warrants to be issued to related party upon consumation of Offering | 700,543 | |||||||||||||||||||||||||||
Warrant [Member] | Mr. Adrian Goldfarb [Member] | ||||||||||||||||||||||||||||
Warrants to be issued to related party upon consumation of Offering | 34,020 | |||||||||||||||||||||||||||
Warrant [Member] | Investor [Member] | ||||||||||||||||||||||||||||
Warrants to be issued to related party upon consumation of Offering | 118,875 | |||||||||||||||||||||||||||
Warrant [Member] | SPA [Member] | ||||||||||||||||||||||||||||
Issuance of common stock | 22,062,742 | |||||||||||||||||||||||||||
Series B Convertible Preferred Stock [Member] | ||||||||||||||||||||||||||||
Preferred stock authorized | 15,000 | 15,000 | ||||||||||||||||||||||||||
Preferred stock, shares issued | 2,830 | 2,830 | 0 | |||||||||||||||||||||||||
Preferred stock, shares outstanding | 2,830 | 2,830 | 0 | |||||||||||||||||||||||||
Series B Convertible Preferred Stock [Member] | ||||||||||||||||||||||||||||
Preferred stock authorized | 10,000,000 | |||||||||||||||||||||||||||
Preferred stock, shares issued | 15,000 | |||||||||||||||||||||||||||
Conversion price | $ 0.50 | |||||||||||||||||||||||||||
Conversion of Preferred stock | $ 1,000 | |||||||||||||||||||||||||||
Percentage of common stock excess | 4.99% | |||||||||||||||||||||||||||
Percentage of purchaser | 9.99% | |||||||||||||||||||||||||||
Series B Convertible Preferred Stock [Member] | JMJ Financial [Member] | ||||||||||||||||||||||||||||
Conversion price | $ 1,000 | |||||||||||||||||||||||||||
Expiration period | 5 years | |||||||||||||||||||||||||||
Common stock conversion | 2,830 | |||||||||||||||||||||||||||
Series B Convertible Preferred Stock [Member] | SPA [Member] | ||||||||||||||||||||||||||||
Preferred stock, shares issued | 2,830 | |||||||||||||||||||||||||||
Exercise price | $ 1,000 | |||||||||||||||||||||||||||
Conversion of Preferred stock | $ 2,830,000 | |||||||||||||||||||||||||||
Series A Convertible Preferred Stock [Member] | ||||||||||||||||||||||||||||
Preferred stock authorized | 10,000,000 | |||||||||||||||||||||||||||
Preferred stock, shares issued | 500,000 | |||||||||||||||||||||||||||
Conversion price | $ 0.18 | |||||||||||||||||||||||||||
Exchange of Common stock into Warrants | 114,793 | 114,793 | ||||||||||||||||||||||||||
Common stock sold | $ 148,000 | $ 148,000 |
NOTE 15 - COMMON STOCK PURCHA64
NOTE 15 - COMMON STOCK PURCHASE WARRANTS (Schedule of activity of warrants) (Details) - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Warrants | |||||||
Warrants expired, forfeited or cancelled | (433,069) | (375) | (1,500) | (3,750) | (302,000) | ||
Warrant [Member] | |||||||
Number of Warrants | |||||||
Outstanding at the beginning of the year | 218,764 | 17,410 | 17,410 | 218,764 | 17,410 | ||
Warrants expired, forfeited or cancelled | (433,444) | (8,779) | |||||
Warrants issued with debt, debt modifications or services | 10,967,012 | 210,283 | |||||
Warrants issued for common stock | 14,464,000 | (150) | |||||
Outstanding at end of period | 25,216,332 | 25,216,332 | 218,764 | 17,410 | |||
Exercisable at end of period | 25,216,332 | 25,216,332 | |||||
Weighted Avg. Exercise Price | |||||||
Outstanding at the beginning of the year | $ 8.4 | $ 18.90 | $ 18.90 | $ 8.4 | $ 18.90 | ||
Warrants expired, forfeited or cancelled | 233.45 | 14.35 | |||||
Warrants issued with debt, debt modifications or services | 0.65 | 8.05 | |||||
Warrants exchanged for common stock | 233.45 | ||||||
Outstanding at end of period | $ 0.65 | 0.65 | $ 8.4 | $ 18.90 | |||
Exercisable at end of period | $ 0.65 | $ 0.65 | |||||
Remaining Contractual Life (Years) | |||||||
Outstanding at the beginning of the year | 4 years 7 months 6 days | 4 years 7 months 6 days | 4 years 6 months | ||||
Warrants issued with debt, debt modifications or services | 4 years 7 months 6 days | 4 years 7 months 6 days | |||||
Outstanding at end of period | 4 years 10 months 24 days | ||||||
Exercisable at end of period | 4 years 10 months 24 days |
NOTE 15 - COMMON STOCK PURCHA65
NOTE 15 - COMMON STOCK PURCHASE WARRANTS (Narrative) (Details) - USD ($) | Apr. 02, 2016 | Apr. 30, 2016 | Jan. 22, 2016 | Dec. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2016 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2015 |
Warrant issued | 200,000 | 2,500,000 | 14,464,000 | 194,888 | 4,659,893 | 54,122 | 59,548 | 14,963 | |||
Warrant exercise price | $ 0.40 | $ 0.35 | $ 0.001 | $ 0.001 | |||||||
Fair value of the warrants | $ 43,272 | $ 466,031 | $ 509,303 | ||||||||
Warrant term | 3 years | ||||||||||
Warrants issued for debt/services | 8,452,180 | ||||||||||
Warrants exchanged | 5,250 | 5,250 | |||||||||
Common shares issued | 2,100 | ||||||||||
Loss on settlement charged to operations | $ 630 | $ 630 | |||||||||
Warrants expired | 433,069 | 375 | 1,500 | 3,750 | 302,000 | ||||||
Private Placement [Member] | |||||||||||
Warrant issued | 2,206,274 |
NOTE 16 - DERIVATIVE FINANCIA66
NOTE 16 - DERIVATIVE FINANCIAL INSTRUMENTS (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 20, 2016 | |
Expected Volatility | 144.00% | |
Expected Remaining Term | 4 years 11 months 19 days | |
Risk Free Interest Rate | 2.04% | |
Minimum [Member] | ||
Expected Volatility | 37.00% | |
Expected Remaining Term | 4 years 26 days | |
Risk Free Interest Rate | 1.80% | |
Maximum [Member] | ||
Expected Volatility | 144.00% | |
Expected Remaining Term | 5 years | |
Risk Free Interest Rate | 2.13% |
NOTE 16 - DERIVATIVE FINANCIA67
NOTE 16 - DERIVATIVE FINANCIAL INSTRUMENTS (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Nov. 30, 2017 | Apr. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Apr. 02, 2016 | Dec. 31, 2015 | |
Warrant issued | 2,500,000 | 14,464,000 | 4,659,893 | 54,122 | 59,548 | 194,888 | 200,000 | 14,963 | |
Warrant exercise price | $ 0.35 | $ 0.001 | $ 0.40 | $ 0.001 | |||||
Warrant term | 3 years | ||||||||
Derivative Financial Instruments [Member] | |||||||||
Warrant issued | 433,069 | ||||||||
Warrant exercise price | $ 5.25 | ||||||||
Warrant term | 5 years | ||||||||
Debt financing on Warrant | $ 2,105,263 | ||||||||
Recognized a loss from the change in derivative liability | $ 2,743,686 | $ 264,099 | |||||||
Derivative Financial Instruments [Member] | Minimum [Member] | |||||||||
Common stock closing price | $ 1.05 | ||||||||
Derivative Financial Instruments [Member] | Maximum [Member] | |||||||||
Common stock closing price | $ 8.75 |
NOTE 17 - FAIR VALUE MEASUREM68
NOTE 17 - FAIR VALUE MEASUREMENTS (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Liabilities: | ||
Liability for warrant derivative instruments | $ 793,099 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Liabilities: | ||
Liability for warrant derivative instruments | ||
Significant Other Observable Inputs (Level 2) [Member] | ||
Liabilities: | ||
Liability for warrant derivative instruments | ||
Significant Unobservable Inputs (Level 3) [Member] | ||
Liabilities: | ||
Liability for warrant derivative instruments | $ 793,099 |
NOTE 17 - FAIR VALUE MEASUREM69
NOTE 17 - FAIR VALUE MEASUREMENTS (Fair value liability of warrant derivative instruments) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Note 17 - Fair Value Measurements Fair Value Liability Of Warrant Derivative Instruments Details | ||
Begining Balance | $ 793,099 | |
Initial fair value of warrant liability | 2,046,347 | 746,980 |
Gain on change in fair value included in Other Income and Expense | (2,743,686) | 46,119 |
Balance at final valuation and written off to Additional Paid In Capital | (95,760) | |
Ending Balnace | 793,099 | |
Fair Value of Warrant liability expense | 217,980 | |
Fair Value of Warrant debt discount | $ 529,000 |
NOTE 18 - SUBSEQUENT EVENTS (De
NOTE 18 - SUBSEQUENT EVENTS (Details) - USD ($) | Mar. 08, 2018 | Jan. 05, 2018 | Jan. 18, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 30, 2016 | Apr. 02, 2016 | Dec. 31, 2015 |
Subsequent Event [Line Items] | ||||||||
Number of authorized shares | 500,000,000 | 500,000,000 | ||||||
Strike price | $ 0.001 | $ 0.35 | $ 0.40 | $ 0.001 | ||||
Subsequent Event [Member] | 2016 Equity Incentive Plan [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of authorized shares | 2,500,000 | |||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Repayment of related party | $ 48,215 | |||||||
Subsequent Event [Member] | Director [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Issurance of stock options | 2,443,333 | |||||||
Strike price | $ 1 |