Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Apr. 05, 2019 | Jun. 29, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | DUOS TECHNOLOGIES GROUP, INC. | ||
Entity Central Index Key | 0001396536 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
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 | Non-accelerated Filer | ||
EntitySmallBusiness | true | ||
EntityShellCompany | false | ||
EntityEmergingGrowthCompany | false | ||
Entity Public Float | $ 4,824,852 | ||
Entity Common Stock, Shares Outstanding | 24,635,952 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash | $ 1,209,301 | $ 1,941,818 |
Accounts receivable, net | 1,538,793 | 298,304 |
Contract assets | 1,208,604 | 423,793 |
Prepaid expenses and other current assets | 235,198 | 90,923 |
Total Current Assets | 4,191,896 | 2,754,838 |
Property and equipment, net | 204,226 | 65,362 |
OTHER ASSETS: | ||
Software Development Costs, net | 40,000 | |
Patents and trademarks, net | 53,871 | 45,978 |
Total Other Assets | 93,871 | 45,978 |
TOTAL ASSETS | 4,489,993 | 2,866,178 |
CURRENT LIABILITIES: | ||
Accounts payable | 1,416,716 | 812,618 |
Accounts payable - related parties | 13,473 | 12,598 |
Notes payable - financing agreements | 48,330 | 49,657 |
Notes payable - related parties | 9,078 | |
Line of credit | 31,201 | 34,513 |
Payroll taxes payable | 317,573 | 149,448 |
Accrued expenses | 222,328 | 497,277 |
Contract liabilities | 2,248,829 | 200,410 |
Deferred revenue | 362,528 | 438,907 |
Total Current Liabilities | 4,660,978 | 2,204,506 |
Notes payable - related party | 39,137 | |
Total Liabilities | 4,660,978 | 2,243,643 |
Commitments and Contingencies (Note 11) | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock: $0.001 par value, 10,000,000 authorized, 9,485,000 shares available to be designated | ||
Common stock: $0.001 par value; 500,000,000 shares authorized, 21,082,351 and 20,657,850 shares issued, 21,075,958 and 20,654,570 shares outstanding at December 31, 2018 and December 31, 2017, respectively | 21,082 | 20,658 |
Additional paid-in capital | 27,397,225 | 26,608,823 |
Total stock & paid-in-capital | 30,248,307 | 29,459,481 |
Accumulated deficit | (30,269,833) | (28,688,946) |
Sub-total | (21,526) | 770,535 |
Less: Treasury stock (6,393 and 3,280 shares of common stock at December 31, 2018 and 2017, respectively) | (149,459) | (148,000) |
Total Stockholders' Equity (Deficit) | (170,985) | 622,535 |
Total Liabilities and Stockholders' Equity (Deficit) | 4,489,993 | 2,866,178 |
Series A Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock: $0.001 par value, 10,000,000 authorized, 9,485,000 shares available to be designated | ||
Series B Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock: $0.001 par value, 10,000,000 authorized, 9,485,000 shares available to be designated | $ 2,830,000 | $ 2,830,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
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 | 21,082,351 | 20,657,850 |
Common stock, shares outstanding | 21,075,958 | 20,654,570 |
Treasury stock shares | 6,393 | 3,280 |
Series A Convertible Preferred Stock [Member] | ||
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 | 0 |
Series A redeemable convertible cumulative preferred stock, shares outstanding | 0 | 0 |
Preferred stock, conversion price per share | $ 6.30 | $ 6.30 |
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 | 2,830 |
Preferred stock, shares outstanding | 2,830 | 2,830 |
Preferred stock, conversion price per share | $ 0.50 | $ 0.50 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
REVENUES: | ||
Total Revenues | $ 12,048,619 | $ 3,884,588 |
COST OF REVENUES: | ||
Total Cost of Revenues | 6,844,396 | 2,294,552 |
GROSS PROFIT | 5,204,223 | 1,590,036 |
OPERATING EXPENSES: | ||
Selling and marketing expenses | 289,140 | 179,318 |
Salaries, wages and contract labor | 4,299,799 | 3,098,782 |
Research and development | 488,694 | 310,099 |
Professional Fees | 245,033 | 393,531 |
General and administrative expenses | 1,451,461 | 1,051,799 |
Total Operating Expenses | 6,774,127 | 5,033,529 |
INCOME (LOSS) FROM OPERATIONS | (1,569,904) | (3,443,493) |
OTHER INCOME (EXPENSES): | ||
Interest expense | (17,180) | (4,519,035) |
Gain on settlement of debt | 64,647 | |
Warrant derivative gain | 2,743,686 | |
Other income, net | 6,197 | 1,719 |
Total Other Income (Expense) | (10,983) | (1,708,983) |
NET INCOME (LOSS) | (1,580,887) | (5,152,477) |
Series A preferred stock dividends | (17,760) | |
Net income (loss) applicable to common stock | $ (1,580,887) | $ (5,170,237) |
Basic Net Income (Loss) Per Share | $ (0.08) | $ (1.43) |
Diluted Net Income (Loss) Per Share | $ (0.08) | $ (1.43) |
Weighted Average Shares-Basic | 20,796,132 | 3,606,401 |
Weighted Average Shares-Diluted | 20,796,132 | 3,606,401 |
Project Revenues [Member] | ||
REVENUES: | ||
Total Revenues | $ 10,753,926 | $ 1,884,079 |
COST OF REVENUES: | ||
Total Cost of Revenues | 6,373,684 | 1,487,516 |
Maintenance and Technical Support Revenues [Member] | ||
REVENUES: | ||
Total Revenues | 1,170,215 | 1,127,932 |
COST OF REVENUES: | ||
Total Cost of Revenues | 409,316 | 458,960 |
IT Asset Management Services Revenues [Member] | ||
REVENUES: | ||
Total Revenues | 124,478 | 872,577 |
COST OF REVENUES: | ||
Total Cost of Revenues | $ 61,396 | $ 348,076 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Series B Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock | Total |
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 | ||||
Common stock issued for services | $ 52 | 73,656 | 73,708 | |||
Common stock issued for services, shares | 52,209 | |||||
Stock options granted to employees | 447,826 | 447,826 | ||||
Common stock issued for warrants exercised | $ 300 | 194,700 | 195,000 | |||
Common stock issued for warrants exercised, shares | 300,000 | |||||
Common stock issued for conversion of salary | $ 72 | 72,220 | 72,292 | |||
Common stock issued for conversion of salary, shares | 72,292 | |||||
Acquisition of stock | (1,459) | (1,459) | ||||
Net Loss | (1,580,887) | (1,580,887) | ||||
Balance at Dec. 31, 2018 | $ 2,830,000 | $ 21,082 | $ 27,397,225 | $ (30,269,833) | $ (149,459) | $ (170,985) |
Balance, shares at Dec. 31, 2018 | 2,830 | 21,082,351 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash from operating activities: | ||
Net Loss | $ (1,580,887) | $ (5,152,477) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 98,922 | 48,283 |
Gain on settlement of debt | (64,647) | |
Stock issued per origination fee | 750,000 | |
Stock option expense | 447,826 | |
Amortization of debt discounts | 2,724,389 | |
Initial fair value of warrant liability | 735,347 | |
Warrant derivative gain | (2,743,686) | |
Changes in assets and liabilities: | ||
Accounts receivable | (1,240,489) | (41,315) |
Contract assets | (784,811) | 52,880 |
Prepaid expenses and other current assets | 97,964 | 263,827 |
Accounts payable | 604,096 | 184,829 |
Accounts payable-related party | 875 | (27,538) |
Payroll taxes payable | 168,125 | (295,028) |
Accrued expenses | (128,948) | 258,307 |
Contract liabilities | 2,048,419 | (19,215) |
Deferred revenue | (76,379) | (236,262) |
Net cash used in operating activities | (345,287) | (3,562,306) |
Cash flows from investing activities: | ||
Software development costs | (60,000) | |
Purchase of patents/trademarks | (13,285) | |
Purchase of fixed assets | (212,393) | (41,709) |
Net cash used in investing activities | (285,678) | (41,709) |
Cash flows from financing activities: | ||
Repayments of line of credit | (3,312) | (3,506) |
Repayments of related party notes | (48,215) | (432,527) |
Repayments of insurance and equipment financing | (243,566) | |
Repayments of notes payable | (1,766,250) | |
Repayments of series A convertible stock | (319,680) | |
Repurchase of common stock | (1,459) | |
Proceeds from series B preferred stock | 1,000,000 | |
Proceeds from common stock, net | 5,777,390 | |
Proceeds from warrants exercised | 195,000 | |
Repayments from financing agreements | (217,470) | |
Proceeds of notes payable | 1,333,500 | |
Net cash (used in) provided by financing activities | (101,552) | 5,371,457 |
Net (decrease) increase in cash | (732,517) | 1,767,442 |
Cash, beginning of year | 1,941,818 | 174,376 |
Cash, end of year | 1,209,301 | 1,941,818 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid | 7,411 | 126,975 |
Tax paid | ||
Supplemental Non-Cash Investing and Financing Activities: | ||
Common stock issued for accrued BOD fees | 73,708 | |
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 | 72,292 | 700,543 |
Accrued interest forgiven related to note payable settlement | 20,697 | |
Accrued dividends | 17,760 | |
Debt discount related to notes payable | 1,571,250 | |
Note issued for financing of insurance premiums | $ 242,239 | $ 220,760 |
NOTE 1 - NATURE OF OPERATIONS A
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
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. The Company provides its broad range of technology solutions with an emphasis on mission critical security, inspection and operations within the rail transportation, commercial, petrochemical, government, and banking sectors. The Company also offers professional and consulting services for large data centers. 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. 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 net contract revenues and the total estimated costs to determine progress towards contract completion, 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, 2018 or 2017. 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, 2018, and 2017, balance in one financial institution exceeded federally insured limits by $1,007,029 and $1,724,594, respectively. Significant Customers and Concentration of Credit Risk 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: For the year ended December 31, 2018, two customers accounted for 50% and 33% of revenues. For the year ended December 31, 2017, three customers accounted for 22%, 20% and 18% of revenues. At December 31, 2018, The two customers that make up the concentration of Credit Risk are both large companies with established businesses. One is the third largest retailer in the United States and is a Fortune 200 company. The other is one of the largest of seven Class 1 railroads and operates in both Canada and the United States. Geographic Concentration Approximately 53% and 4.35% of revenue in 2018 and 2017, respectively, is generated from customers outside of the United States. Fair Value of Financial Instruments and Fair Value Measurements We measure our financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash 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 Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs. The technological feasibility of a software product is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the product meets its design specifications, including functionality, features, and technical performance requirements. Software development costs incurred after establishing technological feasibility for software sold as a perpetual license, as defined within ASC 985-20 (Software – Costs of Software to be sold, Leased, or Marketed) are capitalized and amortized on a product-by-product basis when the product is available for general release to customers. 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, 2018 and 2017, the warranty costs have been de-minimis; 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 As of January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-89, Revenue from Contracts with Customers (“ASC 606”), that affects the timing of when certain types of revenues will be recognized. The basic principles in ASC 606 include the following: a contract with a customer creates distinct unrecognized contract assets and performance obligations; satisfaction of a performance obligation creates revenue; and a performance obligation is satisfied upon transfer of control to a good or service to a customer. Revenue is recognized for sales of systems and services over time using cost-based input methods, in which significant judgement is required to evaluate assumptions including the amount of net contract revenues and the total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize. Revenue is recognized by evaluating our revenue contracts with customers based on the five-step model under ASC 606: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to separate performance obligations; and 5. Recognize revenue when (or as) each performance obligations is satisfied. Accordingly, the Company now bases its revenue recognition on ASC 606-10-25-27, where control of a good or service transfers over time if the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date including a profit margin or reasonable return on capital. Control is deemed to pass to the customer instantaneously as the goods are manufactured and revenue is recognized accordingly. In addition, the Company has adopted ASC 606-10-55-21 such that if the cost incurred is not proportionate to the progress in satisfying the performance obligation, we adjust the input method to recognize revenue only to the extent of the cost incurred. Therefore, the Company will recognize revenue at an equal amount to the cost of the goods to satisfy the performance obligation. To accurately reflect revenue recognition based on the input method, the Company has adopted the implementation guidance as set out in ASC-606-10-55-187 through 192. 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 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. 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. Disaggregation of Revenue The Company is following the guidance of ASC 606-10-55-296 and 297 for disaggregation of revenue. Accordingly, revenue has been disaggregated according to the nature, amount, timing and uncertainty of revenue and cash flows. We are providing qualitative and quantitative disclosures. Qualitative: 1. We have three distinct revenue sources: a. Turnkey, engineered projects; b. Associated maintenance and support services; and c. Professional services related to auditing of data center assets. 2. We currently operate in North America including the USA, Mexico and Canada. 3. Our customers include rail transportation, commercial, petrochemical, government, banking and IT suppliers. 4. Our contracts are fixed-price and fall into two duration types: a. Turnkey engineered projects and professional service contracts that are less than 1 year in duration and are typically three to nine months in length; and b. Maintenance and support contracts ranging from one to five years in length. 5. Transfer of goods and services are over time. Quantitative: For the Year Ended December 31, 2018 Segments Rail Commercial Petrochemical Government Banking IT Suppliers Total Primary Geographical Markets North America $ 7,426,613 $ 3,523,964 $ 61,626 $ 515,465 $ 396,473 $ 124,478 $ 12,048,619 Major Goods and Service Lines Turnkey Projects $ 6,378,927 $ 3,520,919 $ 20,022 $ 437,585 $ 396,473 $ — $ 10,753,926 Maintenance & Support 1,047,686 3,045 41,604 77,880 — — 1,170,215 Data Center Auditing Services — — — — — 124,478 124,478 $ 7,426,613 $ 3,523,964 $ 61,626 $ 515,465 $ 396,473 $ 124,478 $ 1,2048,619 Timing of Revenue Recognition Goods transferred over time $ 6,378,927 $ 3,520,919 $ 20,022 $ 437,585 $ 396,473 $ — $ 10,753,926 Services transferred over time 1,047,686 3,045 41,604 77,880 — 124,478 1,294,693 $ 7,426,613 $ 3,523,964 $ 61,626 $ 515,465 $ 396,473 $ 124,478 $ 12,048,619 Advertising The Company expenses the cost of advertising. During the years ended December 31, 2018 and 2017, there were no advertising costs. Share-Based Compensation The Company accounts for employee stock-based compensation in accordance with ASC 718-10, “ Share-Based Payment The Company accounts for non-employee stock-based compensation in accordance with ASC 505-50-25, “ Equity Based Payments to Non-Employees, Determining Fair Value Under ASC 718-10 The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The Company’s determination of fair value using an option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables. The Company estimates volatility based upon the historical stock price of the Company and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term for non-employees. The risk-free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities. 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, 2018, 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 2016, 2017 and 2018 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, 2018 and 2017, there were an aggregate of 25,112,547 and 25,216,332 outstanding warrants to purchase shares of common stock respectively; 2,242,000 and 0 incentive stock options to purchase shares of common stock at December 31, 2018 and 2017 respectively; and at December 31, 2018 and 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. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)” (“ASU 2016-02”). The FASB issued ASU 2016-02 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under ASU 2016-02, a lessee will recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for the lease term. The amendments of this ASU are effective for reporting periods beginning after December 15, 2018, with early adoption permitted. An entity will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Management currently does not plan to early adopt this guidance and is evaluating the potential impact of this guidance on the consolidated financial statements as well as transition methods. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718). This update is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to non-employees (for example, service providers, external legal counsel, suppliers, etc.). The ASU expands the scope of Topic 718, Compensation—Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to non-employees for goods and services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. This standard will be effective for financial statements issued by public companies for the annual and interim periods beginning after December 15, 2018. Early adoption of the standard is permitted. The standard will be applied in a retrospective approach for each period presented. Management currently does not plan to early adopt this guidance and is evaluating the potential impact of this guidance on the consolidated financial statements as well as transition methods. |
NOTE 2 - GOING CONCERN
NOTE 2 - GOING CONCERN | 12 Months Ended |
Dec. 31, 2018 | |
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 $1,580,887 in 2018. During the same period, cash used in operating activities was $345,287. The working capital deficit, accumulated deficit and stockholders’ deficit as of December 31, 2018 was $469,082, $30,269,833 and $170,985, respectively. 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. Management believes that the Company has reached the point where anticipated profitable operations from current backlog in the final quarter of the year will allow continuation as a going concern for a period of at least twelve months from the date these financial statements have been issued. The ability to recognize revenue and ultimately cash receipts is contingent upon, but not limited to, acceptable performance of the delivered services. If the Company is unable to complete on some of its revenue producing opportunities in the near term, the ability to continue as a going concern based on management’s assessment may be impacted. 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 although such additional capital is expected in the near future (see Note 16). Ultimately the continuation of the Company as a going concern is dependent upon the ability of the Company to continue executing the plan described above which was put in place in 2018 and will continue in 2019 and beyond. As a result, we expect to generate sufficient revenue and to attain profitable operations with minimal cash use in the next 12 months. 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, 2018 | |
Receivables [Abstract] | |
NOTE 3 - ACCOUNTS RECEIVABLE | NOTE 3 – ACCOUNTS RECEIVABLE Accounts receivable were as follows at December 31, 2018 and 2017: 2018 2017 Accounts receivable $ 1,538,793 $ 298,304 Allowance for doubtful accounts — — $ 1,538,793 $ 298,304 There was bad debt expense related to accounts receivable of $0 in 2018 and 2017. |
NOTE 4 - PROPERTY AND EQUIPMENT
NOTE 4 - PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017: 2018 2017 Furniture, fixtures and equipment $ 1,074,976 $ 862,582 Less: Accumulated depreciation (870,750 ) (797,220 ) $ 204,226 $ 65,362 Total depreciation in 2018 and 2017 was $73,530 and $42,838, respectively. |
NOTE 5 - PATENTS AND TRADEMARKS
NOTE 5 - PATENTS AND TRADEMARKS | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
NOTE 5 - PATENTS AND TRADEMARKS | NOTE 5 – PATENTS AND TRADEMARKS 2018 2017 Patents and trademarks $ 280,490 $ 267,205 Less: Accumulated amortization (226,619 ) (221,227 ) $ 53,871 $ 45,978 Total amortization of patents in 2018 and 2017 was $5,392 and $5,445, respectively. |
NOTE 6 - SOFTWARE DEVELOPMENT C
NOTE 6 - SOFTWARE DEVELOPMENT COSTS | 12 Months Ended |
Dec. 31, 2018 | |
SOFTWARE DEVELOPMENT COSTS [Abstract] | |
NOTE 6 - SOFTWARE DEVELOPMENT COSTS | NOTE 6 – SOFTWARE DEVELOPMENT COSTS In 2018, the Company capitalized $60,000, relating to the development of new software products. These software products were developed by a third-party and had passed the preliminary project stage prior to capitalization. 2018 2017 Software development costs $ 60,000 $ — Less: Accumulated amortization (20,000 ) — $ 40,000 $ — Total amortization of patents in 2018 and 2017 was $20,000 and zero, respectively. |
NOTE 7 - DEBT
NOTE 7 - DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
NOTE 7 - DEBT | NOTE 7 – 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, 2018 and 2017: December 31, 2018 December 31, 2017 Notes Payable Principal Interest Principal Interest Third Party - Insurance Note 1 $ 25,066 9.29 % $ 25,075 10.30 % Third Party - Insurance Note 2 8,501 10.75 % 11,679 10.00 % Third Party - Insurance Note 3 14,763 10.25 % 12,903 9.24 % Total $ 48,330 $ 49,657 The Company entered into an agreement on December 23, 2017 with its insurance provider by executing a $25,075 note payable (Insurance Note 1) issued to purchase an insurance policy, secured by that policy with an annual interest rate of 10.30% payable in monthly installments of principal and interest totaling $2,234 through October 23, 2018. The Company renewed the insurance policy by executing a $25,066 note payable with an annual interest rate of 9.29% payable in monthly installments of principal and interest totaling $2,172. The balance of Insurance Note 1 as of December 31, 2018 and December 31, 2017 was $25,066 and $25,075, respectively. The Company entered into an agreement on September 15, 2018 renewing with its insurance provider by executing a $15,810 note payable (Insurance Note 2), secured by that policy, with an annual interest rate of 10.75% payable in monthly installments of principal and interest totaling $1,660 through July 15, 2019. At December 31, 2018 and December 31, 2017, the balance of Insurance Note 2 was $8,501 and $11,679, respectively. The Company entered into an agreement on April 15, 2017 with its insurance provider by executing a $49,000 note payable (Insurance Note 3) 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 $4,373 through February 15, 2018. The policy renewed on April 15, 2018 in the amount of $49,000 with an annual interest rate of 10.25% payable in monthly installments of principal and interest totaling $4,378. At December 31, 2018 and December 31, 2017, the balance of Insurance Note 4 was $14,763 and $12,903, 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, 2018 and 2017: December 31, 2018 December 31, 2017 Notes Payable Principal Interest Principal Interest CEO $ — $ 9,078 8 % Sub-total current portion — 9,078 Add long-term portion-CEO — 39,137 Total $ — $ 48,215 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. On January 5, 2018, the Company repaid the loan in full from the funds received in November 2017 as a result of a capital raise. As of December 31, 2018, and December 31, 2017, the outstanding balance was zero and $48,215, respectively. |
NOTE 8 - LINE OF CREDIT
NOTE 8 - LINE OF CREDIT | 12 Months Ended |
Dec. 31, 2018 | |
Line of Credit Facility [Abstract] | |
NOTE 8 - LINE OF CREDIT | NOTE 8 – 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, 2018 and 2017, was $31,201 and $34,513, respectively, including accrued interest. This line of credit has no maturity date. The annual interest rate is the Prime Rate plus 8% (12% at December 31, 2018). The former CEO of ISA is the personal guarantor. |
NOTE 9 - CONTRACT ACCOUNTING
NOTE 9 - CONTRACT ACCOUNTING | 12 Months Ended |
Dec. 31, 2018 | |
Contractors [Abstract] | |
NOTE 9 - CONTRACT ACCOUNTING | NOTE 9 – CONTRACT ACCOUNTING Contract Assets Contract assets 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, 2018 and 2017, contract assets on uncompleted contracts consisted of the following: 2018 2017 Costs and estimated earnings recognized $ 4,273,057 $ 1,613,731 Less: Billings or cash received (3,064,453 ) (1,189,938 ) Contract Assets $ 1,208,604 $ 423,793 Contract Liabilities Contract liabilities 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, 2018 and 2017, contract liabilities on uncompleted contracts consisted of the following: 2018 2017 Billings and/or cash receipts on uncompleted contracts $ 8,563,241 $ 573,847 Less: Costs and estimated earnings recognized (6,314,412 ) (373,437 ) Contract Liabilities $ 2,248,829 $ 200,410 |
NOTE 10 - DEFERRED COMPENSATION
NOTE 10 - DEFERRED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
Compensation Related Costs [Abstract] | |
NOTE 10 - DEFERRED COMPENSATION | NOTE 10 – DEFERRED COMPENSATION As of December 31, 2018, and 2017, the Company has accrued $169,136 and $304,203, respectively, of deferred compensation relating to the individual agreements, which are included in the accompanying consolidated balance sheet in accrued expenses. |
NOTE 11 - COMMITMENTS AND CONTI
NOTE 11 - COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 11 - COMMITMENTS AND CONTINGENCIES | NOTE 11 – 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 2018 and 2017 was $9,485 and $12,320, respectively. Year Ended December 31, 2018 2017 Purchase Power/FP Mailing $ 195 $ 369 Coffee Perks/A. Antique Coffee Services 310 382 Canon 8,980 11,569 Total Operating Leases rent expense $ 9,485 $ 12,230 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. The rent is subject to an annual escalation of 3%, beginning May 1, 2017. The Company entered a new lease agreement of office and warehouse space on June 1, 2018 and ending May 31, 2021. This additional space allows for resource growth and engineering efforts for operations before deploying to the field. Minimum rent payments under these leases are recognized on a straight-line basis over the term of the leases. The current monthly lease payment is $20,177. Rental expense for the office lease during 2018 and 2017 was $209,389 and $174,878, respectively. The following is a schedule of future minimum lease payments for non-cancelable operating leases are as follows: 2019 $ 233,658 2020 235,019 2021 212,471 Total $ 681,148 Delinquent Payroll Taxes Payable As of the date hereof, the Company has paid its payroll taxes in full and the Company had appealed the IRS penalty payments for a reduction which was under review. The IRS has since responded, and the Company will be required to repay the penalties in connection with the delinquent payroll taxes. At December 31, 2018, the payroll taxes payable balance of $317,573 includes accrued late fees in the amount of $123,572. The Company has started making monthly payments in the amount of $15,000 starting in July 2018 to pay down the accrued late fees. Licensing Agreement The Company has entered into a new software license and configuration services agreement with a third-party vendor. The annual support and maintenance fees of approximately $300,000 include support and updates to the vendor’s Gateway software and customer access to their services (including web application, mobile application, and associated APIs) for gateway configuration, gateway monitoring and management, application configuration, application management, and automatic model updates. The Company has also entered into a SaaS Agreement with the same vendor that is an Amazon AWS-hosted software service enabling the automation of visual observation tasks using deep convolutional neural networks and other computer vision techniques. It consists of a public API, web application, iPhone application, and associated backend services. The system supports the labeling of example image data, the automatic building of classification, detection, localization, measuring and counting applications based on the labeled example data, and the run-time deployment of the trained application models. |
NOTE 12 - INCOME TAXES
NOTE 12 - INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
NOTE 12 - INCOME TAXES | NOTE 12 – 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, 2018 and 2017 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. 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, 2018 and 2017 were as follows: Years Ended December 31, 2018 2017 Income tax benefit at U.S. statutory rate of 21% in 2018 and 34% in 2017 $ (331,986 ) $ (1,751,842 ) State income taxes (56,912 ) (185,489 ) Non-deductible expenses 110,165 551,235 Effect of change in federal statutory rate to 21% — 490,618 Change in valuation allowance 278,733 895,478 Total provision for income tax $ — $ — The Company’s approximate net deferred tax assets as of December 31, 2018 and 2017 were as follows: December 31, 2018 2017 Deferred Tax Assets: Net operating loss carryforward $ 4,653,240 $ 4,357,876 Intangible assets 80,472 97,103 4,733,712 4,454,979 Valuation allowance (4,733,712 ) (4,454,979 ) Net deferred tax assets $ — $ — The gross operating loss carryforward was approximately $18,915,611 and $17,715,000 at December 31, 2018 and 2017, respectively. The Company provided a valuation allowance equal to the deferred income tax assets for the years ended December 31, 2018 and 2017 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 $278,733 in 2018. The potential tax benefit arising from the net operating loss carryforward of $4,357,876 from the period prior to Act’s effective date will expire in 2037. The potential tax benefit arising from the net operating loss carryforward of $295,364 from the period following to the Act’s effective date can be carried forward indefinitely within the annual usage limitations. Additionally, the future utilization of the net operating loss carryforward to offset future taxable income is subject to an annual limitations as a result of ownership or business changes that may occur in the future. The Company has not conducted a study to determine the limitations on the utilization of these net operating loss carryforwards. If necessary, the deferred tax assets will be reduced by any carryforward that may not be utilized or expires prior to utilization as a result of such limitations, with a corresponding reduction of the valuation allowance. The Company does not have any uncertain tax positions or events leading to uncertainty in a tax position. The Company’s 2018, 2017 and 2016 Corporate Income Tax Returns are subject to Internal Revenue Service examination. |
NOTE 13 - SERIES A REDEEMABLE C
NOTE 13 - SERIES A REDEEMABLE CONVERTIBLE CUMLATIVE PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2018 | |
Preferred Stock, Including Additional Paid in Capital [Abstract] | |
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, 2018 | |
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. In March 2018, the Board of Directors approved an increase in the total amount of shares or share equivalents that could be issued under the plan to 2,500,000. On April 23, 2018, the Company issued a total of 2,242,000 incentive stock options to certain employees and directors under the plan. 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 2.5 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, 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 21,853,970 common stock purchase warrants issued and outstanding. Common stock issued for services and settlements 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. The Company issued 52,209 shares of common stock on January 31, 2018 for payment of board fees to three directors in the amount of $73,708 for services to the Board. The Company issued 300,000 shares of common stock on September 30, 2018 for the exercise of 300,000 warrants by a shareholder at $0.65 per share or $195,000. The Company issued 72,292 shares of common stock on December 31, 2018 to an employee in exchange for deferred salary at $1.00 per share or $72,292. Treasury Stock In August 2016, the Company’s Board of Directors approved a new class of Preferred Stock, “Series A”. 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. In December of 2017, the Company redeemed all of the Series A and continues to hold 3,280 shares purchased for $148,000 as a part of the original transaction. In December 2018, the Company entered into an agreement with two shareholders to purchase shares from them at fair market value. The Company purchased 1,163 shares at $0.50 per shares and 1,950 shares at $0.45 per share. Accordingly, as of December 31, 2018, and 2017, the Company held 6,393 and 3,280 shares of Company stock at an aggregate value of $149,459, and $148,000 respectively. |
NOTE 15 - COMMON STOCK OPTIONS
NOTE 15 - COMMON STOCK OPTIONS AND WARRANTS | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
NOTE 15 - COMMON STOCK OPTIONS AND WARRANTS | NOTE 15 – COMMON STOCK OPTIONS AND WARRANTS Options 2018 During the second quarter of 2018, 2,242,000 incentive stock options were issued to staff and Directors under the 2016 Equity Compensation plan. The fair value of the incentive stock option grants for the year ended December 31, 2018 estimated using the following weighted- average assumptions: For the Years Ended 2018 2017 Risk free interest rate 2.59% — Expected term in years 2.5 – 2.76 — Dividend yield — — Volatility of common stock 197.13% - 207.27% — Estimated annual forfeitures — — Warrants 2018 During the third quarter of 2018, a shareholder exercised 300,000 warrants in the amount of $195,000. During the fourth quarter of 2018, the Board approved the issuance of warrants to purchase 496,215 shares of the Company’s Common Stock to six shareholders. 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. Number of Weighted Avg. Exercise Price Remaining 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 14,464,000 — Outstanding at December 31, 2017 25,216,332 .65 4.9 Warrants expired, forfeited, cancelled or exercised (300,000 ) 3.9 Warrants issued 496,215 .65 4.9 Outstanding at December 31, 2018 25,412,547 .68 3.9 Exercisable at end of period 25,412,547 $ .66 3.9 |
NOTE 16 - DERIVATIVE FINANCIAL
NOTE 16 - DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
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, certain warrants that were issued as a part of a bridge financing in 2017 were initially recorded as a liability at fair value and were revalued at fair value at each reporting date in 2017, including the period ending December 31, 2017. As of November 2017, the company had 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 re-calculated the estimated fair values of the liabilities for warrant derivative instruments at March 31, June 30 , BSM Inputs Warrants During the year ending December 31, 2018 During the year ending December 31, 2017 Expected Volatility — 37% to 144% Expected Remaining Term — 4.07 years to 5.00 years Risk Free Interest Rate — 1.80% to 2.13% |
NOTE 17 - SUBSEQUENT EVENTS
NOTE 17 - SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
NOTE 17 - SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS On January 29, 2019, the Board of Directors appointed a new independent director and Chairman of the Compensation Committee. As a result of the appointment, the new director was granted 120,000 stock options at $1 strike vesting in 1-year. On March 14, 2019, the Company entered into an agreement with two current shareholders who were also holders of warrants to purchase shares of common stock in the aggregate amount of 1,000,000 and 500,000 shares, respectively, to reduce the exercise price of these warrants to $0.55 from the original exercise price of $0.65 based on immediate exercise. Both shareholders exercised these warrants on March 15, 2019 for proceeds to the Company of $1,650,000. On March 29, 2019, the Company entered into an agreement with a current shareholder to reduce the exercise price of warrants to purchase shares of common stock the shareholder held to $0.55 from the original exercise price of $0.65 based on the immediate exercise of these 684,581 warrants. The deal which was completed on April 1, 2019 for a total amount of $376,520. On April 1, 2019, an employee resigned from the Company who had previously been granted 200,000 stock options. As a result of the resignation, all of the options were cancelled. On April 3, 2019, the Company entered into an agreement with the surviving spouse of a shareholder to purchase 1,599 shares of common stock at fair the market value of $0.74 per share. |
NOTE 1 - NATURE OF OPERATIONS_2
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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. The Company provides its broad range of technology solutions with an emphasis on mission critical security, inspection and operations within the rail transportation, commercial, petrochemical, government, and banking sectors. The Company also offers professional and consulting services for large data centers. 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. |
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 net contract revenues and the total estimated costs to determine progress towards contract completion, 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, 2018 or 2017. |
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, 2018, and 2017, balance in one financial institution exceeded federally insured limits by $1,007,029 and $1,724,594, respectively. Significant Customers and Concentration of Credit Risk 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: For the year ended December 31, 2018, two customers accounted for 50% and 33% of revenues. For the year ended December 31, 2017, three customers accounted for 22%, 20% and 18% of revenues. At December 31, 2018, The two customers that make up the concentration of Credit Risk are both large companies with established businesses. One is the third largest retailer in the United States and is a Fortune 200 company. The other is one of the largest of seven Class 1 railroads and operates in both Canada and the United States. Geographic Concentration Approximately 53% and 4.35% of revenue in 2018 and 2017, respectively, is generated from customers outside of the United States. |
Fair Value Financial Instruments and Fair Value Measurements | Fair Value of Financial Instruments and Fair Value Measurements We measure our financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash 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 Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs. The technological feasibility of a software product is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the product meets its design specifications, including functionality, features, and technical performance requirements. Software development costs incurred after establishing technological feasibility for software sold as a perpetual license, as defined within ASC 985-20 (Software – Costs of Software to be sold, Leased, or Marketed) are capitalized and amortized on a product-by-product basis when the product is available for general release to customers. |
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, 2018 and 2017, the warranty costs have been de-minimis; 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 As of January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-89, Revenue from Contracts with Customers (“ASC 606”), that affects the timing of when certain types of revenues will be recognized. The basic principles in ASC 606 include the following: a contract with a customer creates distinct unrecognized contract assets and performance obligations; satisfaction of a performance obligation creates revenue; and a performance obligation is satisfied upon transfer of control to a good or service to a customer. Revenue is recognized for sales of systems and services over time using cost-based input methods, in which significant judgement is required to evaluate assumptions including the amount of net contract revenues and the total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize. Revenue is recognized by evaluating our revenue contracts with customers based on the five-step model under ASC 606: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to separate performance obligations; and 5. Recognize revenue when (or as) each performance obligations is satisfied. Accordingly, the Company now bases its revenue recognition on ASC 606-10-25-27, where control of a good or service transfers over time if the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date including a profit margin or reasonable return on capital. Control is deemed to pass to the customer instantaneously as the goods are manufactured and revenue is recognized accordingly. In addition, the Company has adopted ASC 606-10-55-21 such that if the cost incurred is not proportionate to the progress in satisfying the performance obligation, we adjust the input method to recognize revenue only to the extent of the cost incurred. Therefore, the Company will recognize revenue at an equal amount to the cost of the goods to satisfy the performance obligation. To accurately reflect revenue recognition based on the input method, the Company has adopted the implementation guidance as set out in ASC-606-10-55-187 through 192. 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 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. |
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. Disaggregation of Revenue The Company is following the guidance of ASC 606-10-55-296 and 297 for disaggregation of revenue. Accordingly, revenue has been disaggregated according to the nature, amount, timing and uncertainty of revenue and cash flows. We are providing qualitative and quantitative disclosures. Qualitative: 1. We have three distinct revenue sources: a. Turnkey, engineered projects; b. Associated maintenance and support services; and c. Professional services related to auditing of data center assets. 2. We currently operate in North America including the USA, Mexico and Canada. 3. Our customers include rail transportation, commercial, petrochemical, government, banking and IT suppliers. 4. Our contracts are fixed-price and fall into two duration types: a. Turnkey engineered projects and professional service contracts that are less than 1 year in duration and are typically three to nine months in length; and b. Maintenance and support contracts ranging from one to five years in length. 5. Transfer of goods and services are over time. Quantitative: For the Year Ended December 31, 2018 Segments Rail Commercial Petrochemical Government Banking IT Suppliers Total Primary Geographical Markets North America $ 7,426,613 $ 3,523,964 $ 61,626 $ 515,465 $ 396,473 $ 124,478 $ 12,048,619 Major Goods and Service Lines Turnkey Projects $ 6,378,927 $ 3,520,919 $ 20,022 $ 437,585 $ 396,473 $ — $ 10,753,926 Maintenance & Support 1,047,686 3,045 41,604 77,880 — — 1,170,215 Data Center Auditing Services — — — — — 124,478 124,478 $ 7,426,613 $ 3,523,964 $ 61,626 $ 515,465 $ 396,473 $ 124,478 $ 1,2048,619 Timing of Revenue Recognition Goods transferred over time $ 6,378,927 $ 3,520,919 $ 20,022 $ 437,585 $ 396,473 $ — $ 10,753,926 Services transferred over time 1,047,686 3,045 41,604 77,880 — 124,478 1,294,693 $ 7,426,613 $ 3,523,964 $ 61,626 $ 515,465 $ 396,473 $ 124,478 $ 12,048,619 |
Advertising | Advertising The Company expenses the cost of advertising. During the years ended December 31, 2018 and 2017, there were no advertising costs. |
Share-Based Compensation | Share-Based Compensation The Company accounts for employee stock-based compensation in accordance with ASC 718-10, “ Share-Based Payment The Company accounts for non-employee stock-based compensation in accordance with ASC 505-50-25, “ Equity Based Payments to Non-Employees, Determining Fair Value Under ASC 718-10 The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The Company’s determination of fair value using an option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables. The Company estimates volatility based upon the historical stock price of the Company and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term for non-employees. The risk-free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities. |
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, 2018, 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 2016, 2017 and 2018 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, 2018 and 2017, there were an aggregate of 25,112,547 and 25,216,332 outstanding warrants to purchase shares of common stock respectively; 2,242,000 and 0 incentive stock options to purchase shares of common stock at December 31, 2018 and 2017 respectively; and at December 31, 2018 and 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flow (Topic 230). This update is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The update provides new guidance regarding the classification of debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies including bank-owned life insurance policies, distributions received from equity method investments, beneficial interests in securitized transactions, and separately identifiable cash flows and application of the predominance principle. This standard is effective for financial statements issued by public companies for the annual and interim periods beginning after December 15, 2017. Early adoption of the standard is permitted. The standard will be applied in a retrospective approach for each period presented. We have completed an initial evaluation of this standard, which requires cash payments for debt prepayment or debt extinguishment costs should be classified as cash outflows for financing activities. We have determined that there were no cash payments involved in debt extinguishment during the year ended December 31, 2018, hence there will be no potential impact on our financial statements due to this update. We will continue to evaluate the potential impact of this guidance on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)” (“ASU 2016-02”). The FASB issued ASU 2016-02 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under ASU 2016-02, a lessee will recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for the lease term. The amendments of this ASU are effective for reporting periods beginning after December 15, 2018, with early adoption permitted. An entity will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Management currently does not plan to early adopt this guidance and is evaluating the potential impact of this guidance on the consolidated financial statements as well as transition methods. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718). This update is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to non-employees (for example, service providers, external legal counsel, suppliers, etc.). The ASU expands the scope of Topic 718, Compensation—Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to non-employees for goods and services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. This standard will be effective for financial statements issued by public companies for the annual and interim periods beginning after December 15, 2018. Early adoption of the standard is permitted. The standard will be applied in a retrospective approach for each period presented. Management currently does not plan to early adopt this guidance and is evaluating the potential impact of this guidance on the consolidated financial statements as well as transition methods. |
NOTE 1 - NATURE OF OPERATIONS_3
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Disaggregation of Revenue Quantitative | Quantitative: For the Year Ended December 31, 2018 Segments Rail Commercial Petrochemical Government Banking IT Suppliers Total Primary Geographical Markets North America $ 7,426,613 $ 3,523,964 $ 61,626 $ 515,465 $ 396,473 $ 124,478 $ 12,048,619 Major Goods and Service Lines Turnkey Projects $ 6,378,927 $ 3,520,919 $ 20,022 $ 437,585 $ 396,473 $ — $ 10,753,926 Maintenance & Support 1,047,686 3,045 41,604 77,880 — — 1,170,215 Data Center Auditing Services — — — — — 124,478 124,478 $ 7,426,613 $ 3,523,964 $ 61,626 $ 515,465 $ 396,473 $ 124,478 $ 1,2048,619 Timing of Revenue Recognition Goods transferred over time $ 6,378,927 $ 3,520,919 $ 20,022 $ 437,585 $ 396,473 $ — $ 10,753,926 Services transferred over time 1,047,686 3,045 41,604 77,880 — 124,478 1,294,693 $ 7,426,613 $ 3,523,964 $ 61,626 $ 515,465 $ 396,473 $ 124,478 $ 12,048,619 |
NOTE 3 - ACCOUNTS RECEIVABLE (T
NOTE 3 - ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable were as follows at December 31, 2018 and 2017: 2018 2017 Accounts receivable $ 1,538,793 $ 298,304 Allowance for doubtful accounts — — $ 1,538,793 $ 298,304 |
NOTE 4 - PROPERTY AND EQUIPME_2
NOTE 4 - PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Major classes of property and equipment | The major classes of property and equipment are as follow at December 31, 2018 and 2017: 2018 2017 Furniture, fixtures and equipment $ 1,074,976 $ 862,582 Less: Accumulated depreciation (870,750 ) (797,220 ) $ 204,226 $ 65,362 |
NOTE 5 - PATENTS AND TRADEMAR_2
NOTE 5 - PATENTS AND TRADEMARKS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Patents and trademarks | 2018 2017 Patents and trademarks $ 280,490 $ 267,205 Less: Accumulated amortization (226,619 ) (221,227 ) $ 53,871 $ 45,978 |
NOTE 6 - SOFTWARE DEVELOPMENT_2
NOTE 6 - SOFTWARE DEVELOPMENT COSTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SOFTWARE DEVELOPMENT COSTS [Abstract] | |
Schedule of Software Development Costs | These software products were developed by a third-party and had passed the preliminary project stage prior to capitalization. 2018 2017 Software development costs $ 60,000 $ — Less: Accumulated amortization (20,000 ) — $ 40,000 $ — |
NOTE 7 - DEBT (Tables)
NOTE 7 - DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable - Financing Agreements | The CompanyÂ’s notes payable relating to financing agreements classified as current liabilities consist of the following as of December 31, 2018 and 2017: December 31, 2018 December 31, 2017 Notes Payable Principal Interest Principal Interest Third Party - Insurance Note 1 $ 25,066 9.29 % $ 25,075 10.30 % Third Party - Insurance Note 2 8,501 10.75 % 11,679 10.00 % Third Party - Insurance Note 3 14,763 10.25 % 12,903 9.24 % Total $ 48,330 $ 49,657 |
Notes Payable - Related Parties | The Company’s notes payable to related parties classified as current liabilities consist of the following as of December 31, 2018 and 2017: December 31, 2018 December 31, 2017 Notes Payable Principal Interest Principal Interest CEO $ — $ 9,078 8 % Sub-total current portion — 9,078 Add long-term portion-CEO — 39,137 Total $ — $ 48,215 |
NOTE 9 - CONTRACT ACCOUNTING (T
NOTE 9 - CONTRACT ACCOUNTING (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Contractors [Abstract] | |
Schedule of contract billings | At December 31, 2018 and 2017, contract assets on uncompleted contracts consisted of the following: 2018 2017 Costs and estimated earnings recognized $ 4,273,057 $ 1,613,731 Less: Billings or cash received (3,064,453 ) (1,189,938 ) Contract Assets $ 1,208,604 $ 423,793 At December 31, 2018 and 2017, contract liabilities on uncompleted contracts consisted of the following: 2018 2017 Billings and/or cash receipts on uncompleted contracts $ 8,563,241 $ 573,847 Less: Costs and estimated earnings recognized (6,314,412 ) (373,437 ) Contract Liabilities $ 2,248,829 $ 200,410 |
NOTE 11 - COMMITMENTS AND CON_2
NOTE 11 - COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating leases | Rental expense for operating leases during 2018 and 2017 was $9,485 and $12,320, respectively. Year Ended December 31, 2018 2017 Purchase Power/FP Mailing $ 195 $ 369 Coffee Perks/A. Antique Coffee Services 310 382 Canon 8,980 11,569 Total Operating Leases rent expense $ 9,485 $ 12,230 |
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: 2019 $ 233,658 2020 235,019 2021 212,471 Total $ 681,148 |
NOTE 12 - INCOME TAXES (Tables)
NOTE 12 - INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017 were as follows: Years Ended December 31, 2018 2017 Income tax benefit at U.S. statutory rate of 21% in 2018 and 34% in 2017 $ (331,986 ) $ (1,751,842 ) State income taxes (56,912 ) (185,489 ) Non-deductible expenses 110,165 551,235 Effect of change in federal statutory rate to 21% — 490,618 Change in valuation allowance 278,733 895,478 Total provision for income tax $ — $ — |
Net deferred tax assets | The Company’s approximate net deferred tax assets as of December 31, 2018 and 2017 were as follows: December 31, 2018 2017 Deferred Tax Assets: Net operating loss carryforward $ 4,653,240 $ 4,357,876 Intangible assets 80,472 97,103 4,733,712 4,454,979 Valuation allowance (4,733,712 ) (4,454,979 ) Net deferred tax assets $ — $ — |
NOTE 15 - COMMON STOCK OPTION_2
NOTE 15 - COMMON STOCK OPTIONS AND WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Fair Value Assumptions | The fair value of the incentive stock option grants for the year ended December 31, 2018 estimated using the following weighted- average assumptions: For the Years Ended 2018 2017 Risk free interest rate 2.59% — Expected term in years 2.5 – 2.76 — Dividend yield — — Volatility of common stock 197.13% - 207.27% — Estimated annual forfeitures — — |
Schedule of Warrants Outstanding | Number of Weighted Avg. Exercise Price Remaining 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 14,464,000 — Outstanding at December 31, 2017 25,216,332 .65 4.9 Warrants expired, forfeited, cancelled or exercised (300,000 ) 3.9 Warrants issued 496,215 .65 4.9 Outstanding at December 31, 2018 25,412,547 .68 3.9 Exercisable at end of period 25,412,547 $ .66 3.9 |
NOTE 16 - DERIVATIVE FINANCIA_2
NOTE 16 - DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Estimated fair values of the liabilities for warrant derivative | BSM Inputs Warrants During the year ending December 31, 2018 During the year ending December 31, 2017 Expected Volatility — 37% to 144% Expected Remaining Term — 4.07 years to 5.00 years Risk Free Interest Rate — 1.80% to 2.13% |
NOTE 1 - NATURE OF OPERATIONS,
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFCANT ACCTG POLICIES (Narratives) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Warrants Outstanding | 25,112,547 | 25,216,332 | |
Number of incentive stock options | 2,242,000 | 0 | |
Product warranty Period | 90 days | ||
Balance at financial institution | $ 1,007,029 | $ 1,724,594 | |
Reverse split | 1 for 35 | ||
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 1 - NATURE OF OPERATIONS_4
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFCANT ACCTG POLICIES (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | Outside of United States [Member] | ||
Product Information [Line Items] | ||
Concentration of Credit Risk | 53.00% | 4.35% |
Customer A [Member] | Revenue | ||
Product Information [Line Items] | ||
Concentration of Credit Risk | 50.00% | 22.00% |
Customer A [Member] | Accounts Receivable | ||
Product Information [Line Items] | ||
Concentration of Credit Risk | 58.00% | 42.00% |
Customer B [Member] | Revenue | ||
Product Information [Line Items] | ||
Concentration of Credit Risk | 33.00% | 20.00% |
Customer B [Member] | Accounts Receivable | ||
Product Information [Line Items] | ||
Concentration of Credit Risk | 34.00% | 17.00% |
Customer C [Member] | Revenue | ||
Product Information [Line Items] | ||
Concentration of Credit Risk | 18.00% | |
Customer C [Member] | Accounts Receivable | ||
Product Information [Line Items] | ||
Concentration of Credit Risk | 13.00% | |
Customer D [Member] | Accounts Receivable | ||
Product Information [Line Items] | ||
Concentration of Credit Risk | 11.00% |
NOTE 1 - NATURE OF OPERATIONS_5
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION (Schedule of Disaggregation of Revenue Quantitative) (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 12,048,619 |
Goods transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 10,753,926 |
Services transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 1,294,693 |
Turnkey Projects [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 10,753,926 |
Maintenance & Support [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 1,170,215 |
Data Center Auditing Services [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | |
Rail [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 7,426,613 |
Rail [Member] | Goods transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 6,378,927 |
Rail [Member] | Services transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 1,047,686 |
Rail [Member] | Turnkey Projects [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 6,378,927 |
Rail [Member] | Maintenance & Support [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 1,047,686 |
Rail [Member] | Data Center Auditing Services [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | |
Commercial [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 3,523,964 |
Commercial [Member] | Goods transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 3,520,919 |
Commercial [Member] | Services transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 3,045 |
Commercial [Member] | Turnkey Projects [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 3,520,919 |
Commercial [Member] | Maintenance & Support [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 3,045 |
Commercial [Member] | Data Center Auditing Services [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | |
Petrochemical [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 61,626 |
Petrochemical [Member] | Goods transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 20,022 |
Petrochemical [Member] | Services transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 41,604 |
Petrochemical [Member] | Turnkey Projects [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 20,022 |
Petrochemical [Member] | Maintenance & Support [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 41,604 |
Petrochemical [Member] | Data Center Auditing Services [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | |
Government [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 515,465 |
Government [Member] | Goods transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 437,585 |
Government [Member] | Services transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 77,880 |
Government [Member] | Turnkey Projects [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 437,585 |
Government [Member] | Maintenance & Support [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 77,880 |
Government [Member] | Data Center Auditing Services [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | |
Banking [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 396,473 |
Banking [Member] | Goods transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 396,473 |
Banking [Member] | Services transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | |
Banking [Member] | Turnkey Projects [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 396,473 |
Banking [Member] | Maintenance & Support [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | |
Banking [Member] | Data Center Auditing Services [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | |
IT Suppliers [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 124,478 |
IT Suppliers [Member] | Goods transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | |
IT Suppliers [Member] | Services transferred over time [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 124,478 |
IT Suppliers [Member] | Turnkey Projects [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | |
IT Suppliers [Member] | Maintenance & Support [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | |
IT Suppliers [Member] | Data Center Auditing Services [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 124,478 |
North America [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 12,048,619 |
North America [Member] | Rail [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 7,426,613 |
North America [Member] | Commercial [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 3,523,964 |
North America [Member] | Petrochemical [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 61,626 |
North America [Member] | Government [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 515,465 |
North America [Member] | Banking [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | 396,473 |
North America [Member] | IT Suppliers [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 124,478 |
NOTE 2 - GOING CONCERN (Narrati
NOTE 2 - GOING CONCERN (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Going Concern [Abstract] | |||
Net Loss | $ 1,580,887 | ||
Net cash used in operations | 345,287 | $ 3,562,306 | |
Working capital deficit | 469,082 | ||
Accumulated deficit | 30,269,833 | 28,688,946 | |
Stockholders' deficit | $ 170,985 | $ (622,535) | $ 5,523,188 |
NOTE 3 - ACCOUNTS RECEIVABLE (D
NOTE 3 - ACCOUNTS RECEIVABLE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | ||
Accounts receivable | $ 1,538,793 | $ 298,304 |
Allowance for doubtful accounts | ||
Accounts Receivable, Net | 1,538,793 | 298,304 |
Bad debt expense |
NOTE 4 - PROPERTY AND EQUIPME_3
NOTE 4 - PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Furniture, fixtures and equipment | $ 1,074,976 | $ 862,582 |
Less: Accumulated depreciation | (870,750) | (797,220) |
Furniture, fixtures and equipment, Net | 204,226 | 65,362 |
Depreciation | $ 73,530 | $ 42,838 |
NOTE 5 - PATENTS AND TRADEMAR_3
NOTE 5 - PATENTS AND TRADEMARKS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents and trademarks | $ 280,490 | $ 267,205 |
Less: Accumulated amortization | (226,619) | (221,227) |
Patents and trademarks, Net | 53,871 | 45,978 |
Amortization of patents | $ 5,392 | $ 5,445 |
NOTE 6 - SOFTWARE DEVELOPMENT_3
NOTE 6 - SOFTWARE DEVELOPMENT COSTS (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
SOFTWARE DEVELOPMENT COSTS [Abstract] | ||
Software Development Costs | $ 60,000 | |
Less: Accumulated amortization | (20,000) | |
Software Development Costs, net | $ 40,000 |
NOTE 6 - SOFTWARE DEVELOPMENT_4
NOTE 6 - SOFTWARE DEVELOPMENT COSTS (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
SOFTWARE DEVELOPMENT COSTS [Abstract] | ||
Capitalized development of new software products | $ 60,000 | |
Amortization expense of software development costs | $ 20,000 |
NOTE 7 - DEBT (Schedule of Note
NOTE 7 - DEBT (Schedule of Notes Payable - Financing Agreements) (Details) - USD ($) | Dec. 31, 2018 | Sep. 15, 2018 | Dec. 31, 2017 | Dec. 23, 2017 |
Debt Instrument [Line Items] | ||||
Notes Payable, Principal | $ 48,330 | $ 49,657 | ||
Third Party - Insurance Note 1 [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes Payable, Principal | $ 25,066 | $ 25,075 | $ 25,075 | |
Notes Payable, Interest | 9.29% | 10.30% | ||
Third Party - Insurance Note 2 [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes Payable, Principal | $ 8,501 | $ 15,810 | $ 11,679 | |
Notes Payable, Interest | 10.75% | 10.00% | ||
Third Party - Insurance Note 3 [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes Payable, Principal | $ 14,763 | $ 12,903 | ||
Notes Payable, Interest | 10.25% | 9.24% |
NOTE 7 - DEBT (Schedule of No_2
NOTE 7 - DEBT (Schedule of Notes Payable - Related Parties) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Sub-total current portion | $ 9,078 | |
Add long-term portion-CEO | 39,137 | |
Notes Payable - Related Parties, Principal Amount | 48,215 | |
Chief Executive Officer [Member] | ||
Debt Instrument [Line Items] | ||
Sub-total current portion | $ 9,078 | |
Notes Payable - Related Parties, Interest Rate | 8.00% |
NOTE 7 - DEBT (Narrative) (Deta
NOTE 7 - DEBT (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Oct. 23, 2018 | Apr. 15, 2018 | Apr. 15, 2017 | Jul. 19, 2016 | Dec. 31, 2018 | Sep. 15, 2018 | Dec. 31, 2017 | Dec. 23, 2017 | |
Debt Instrument [Line Items] | ||||||||
Notes payable outstanding balance | $ 48,330 | $ 49,657 | ||||||
Related party loan from CEO [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Monthly installments of principal and interest | $ 1,052 | |||||||
Interest rate | 7.99% | |||||||
Notes payable outstanding balance | $ 59,925 | 48,215 | ||||||
Proceeds from loan | 60,000 | |||||||
Fees on loan proceeds | $ 75 | |||||||
Third Party - Insurance Note 1 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Monthly installments of principal and interest | $ 2,234 | $ 2,172 | ||||||
Interest rate | 9.29% | 10.30% | ||||||
Notes payable outstanding balance | $ 25,066 | 25,075 | $ 25,075 | |||||
Third Party - Insurance Note 2 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Monthly installments of principal and interest | 1,660 | |||||||
Interest rate | 10.75% | |||||||
Notes payable outstanding balance | 8,501 | $ 15,810 | 11,679 | |||||
Third Party - Insurance Note 3 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Notes payable outstanding balance | 14,763 | 12,903 | ||||||
Third Party - Insurance Note 4 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Monthly installments of principal and interest | $ 4,378 | $ 4,373 | ||||||
Interest rate | 10.25% | 9.24% | ||||||
Notes payable outstanding balance | $ 49,000 | $ 49,000 | $ 14,763 | $ 12,903 |
NOTE 8 - LINE OF CREDIT (Narrat
NOTE 8 - LINE OF CREDIT (Narrative) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 02, 2015 |
Debt Instrument [Line Items] | |||
Line of credit borrowing capacity | $ 40,000 | ||
Line of credit amount outstanding | $ 31,201 | $ 34,513 | |
Prime Rate [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | 8.00% | 12.00% |
NOTE 9 - CONTRACT ACCOUNTING (S
NOTE 9 - CONTRACT ACCOUNTING (Schedule of costs and estimated earnings) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Contractors [Abstract] | ||
Costs and estimated earnings recognized | $ 4,273,057 | $ 1,613,731 |
Less: Billings or cash received | (3,064,453) | (1,189,938) |
Contract Assets | $ 1,208,604 | $ 423,793 |
NOTE 9 - CONTRACT ACCOUNTING _2
NOTE 9 - CONTRACT ACCOUNTING (Schedule of billings in excess of costs and estimated earnings) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Contractors [Abstract] | ||
Billings and/or cash receipts on uncompleted contracts | $ 8,563,241 | $ 573,847 |
Less: Costs and estimated earnings recognized | (6,314,412) | (373,437) |
Contract Liabilities | $ 2,248,829 | $ 200,410 |
NOTE 10 - DEFERRED COMPENSATI_2
NOTE 10 - DEFERRED COMPENSATION (Narrative) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Compensation Related Costs [Abstract] | ||
Accrued deferred compensation | $ 169,136 | $ 304,203 |
NOTE 11 - COMMITMENTS AND CON_3
NOTE 11 - COMMITMENTS AND CONTINGENCIES (Schedule of Rent Expense) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Lessee, Lease, Description [Line Items] | ||
Total Operating Leases rent expense | $ 9,485 | $ 12,320 |
Purchase Power/FP Mailing [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Total Operating Leases rent expense | 195 | 369 |
Coffee Perks/A. Antique Coffee Services [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Total Operating Leases rent expense | 310 | 382 |
Canon [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Total Operating Leases rent expense | $ 8,980 | $ 11,569 |
NOTE 11 - COMMITMENTS AND CON_4
NOTE 11 - COMMITMENTS AND CONTINGENCIES (Schedule of Future Minimum Lease Payments) (Details) | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 233,658 |
2020 | 235,019 |
2021 | 212,471 |
Total | $ 681,148 |
NOTE 11 - COMMITMENTS AND CON_5
NOTE 11 - COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Jul. 31, 2018 | May 01, 2017 | |
Rental expense | $ 9,485 | $ 12,320 | ||
Percentage fo annual escalation | 3.00% | |||
Software maintenance fees | 300,000 | |||
Delinquent payroll tax payable | 317,573 | |||
Payment of accrued late fee | 123,572 | |||
Monthly payroll installment agreement amount | $ 15,000 | |||
Monthly lease payment | 20,177 | |||
Jacksonville, Florida [Member] | ||||
Rental expense | $ 209,389 | $ 174,878 |
NOTE 12 - INCOME TAXES (Schedul
NOTE 12 - INCOME TAXES (Schedule of provision for income taxes) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit at U.S. statutory rate of 21% in 2018 and 34% in 2017 | $ (331,986) | $ (1,751,842) |
State income taxes | (56,912) | (185,489) |
Non-deductible expenses | 110,165 | 551,235 |
Effect of change in federal statutory rate to 21% | 490,618 | |
Change in valuation allowance | 278,733 | 895,478 |
Total provision for income tax |
NOTE 12 - INCOME TAXES (Sched_2
NOTE 12 - INCOME TAXES (Schedule of deferred tax assets) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 4,653,240 | $ 4,357,876 |
Intangible assets | 80,472 | 97,103 |
Gross deferred tax assets | 4,733,712 | 4,454,979 |
Valuation allowance | (4,733,712) | (4,454,979) |
Net deferred tax assets |
NOTE 12 - INCOME TAXES (Narrati
NOTE 12 - INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Gross operating loss carry forward | $ 18,915,611 | $ 17,715,000 |
Increase in tax asset valuation allowance | 278,733 | |
Potential tax benefit arising from net operating loss carryforward | $ 295,364 | |
Operating loss carry forward expiration date | Dec. 31, 2037 | |
Statutory rate | 34.00% | |
Income tax rate effective 2019 | 21.00% |
NOTE 13 - SERIES A REDEEMABLE_2
NOTE 13 - SERIES A REDEEMABLE CONVERTIBLE CUMLATIVE PREFERRED STOCK (Details) - USD ($) | 2 Months Ended | 12 Months Ended | |||
Oct. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 24, 2017 | Dec. 31, 2016 | |
Preferred stock authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||
Proceeds from sale of preferred stock | $ 1,000,000 | ||||
Accrued cumulative dividends | $ 17,760 | $ 5,920 | |||
Preferred stock redemption value | $ 319,680 | ||||
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 annual rate | 8.00% |
NOTE 14 - STOCKHOLDERS' EQUIT_2
NOTE 14 - STOCKHOLDERS' EQUITY (DEFICIT) (Narrative) (Details) - USD ($) | Nov. 24, 2017 | Jan. 31, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 23, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Dec. 31, 2016 |
Class of Stock [Line Items] | ||||||||||||
Preferred stock authorized | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||
Issuance of common stock | $ 7,232,000 | |||||||||||
Issuance of common stock, shares | 350,000 | |||||||||||
Shares available for grant | 2,500,000 | 2,500,000 | ||||||||||
Consuting Expense | $ 25,000 | $ 15,000 | ||||||||||
Warrant Granted | 54,122 | 194,888 | 14,464,000 | 59,548 | ||||||||
Shares Value | $ 21,082 | $ 21,082 | $ 20,658 | |||||||||
Common stock, shares issued | 18,756,180 | 21,082,351 | 21,082,351 | 20,657,850 | ||||||||
Common stock, shares outstanding | 18,756,180 | 21,075,958 | 21,075,958 | 20,654,570 | ||||||||
Common stock issued for services | $ 73,708 | |||||||||||
Common stock issued for services, shares | 6,747 | 2,903 | ||||||||||
Legel fees | $ 175,000 | |||||||||||
Stock issuance costs | $ 1,454,610 | $ 1,454,610 | ||||||||||
Gain on extinguishment of debt | 64,647 | |||||||||||
Treasury stock | $ 149,459 | $ 149,459 | $ 148,000 | |||||||||
Treasury stock shares | 6,393 | 6,393 | 3,280 | |||||||||
Repurchase of common stock | $ 1,459 | |||||||||||
Private Placement [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Warrant Granted | 2,206,274 | |||||||||||
Shareholder [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Issuance of common stock | $ 300,000 | |||||||||||
Issuance of common stock, shares | 195,000 | |||||||||||
Market value of stock repurchased | $ 0.50 | |||||||||||
Repurchase of common stock | $ 1,163 | |||||||||||
Shareholder [Member] | Private Placement [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Issuance of common stock | $ 300,000 | |||||||||||
Issuance of common stock, shares | 195,000 | |||||||||||
Exercise price | $ 0.65 | |||||||||||
Shareholder [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Market value of stock repurchased | $ 0.50 | |||||||||||
Repurchase of common stock | $ 1,950 | |||||||||||
SPA [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
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 | 35.00% | |||||||||||
Board of Directors [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock issued for services | $ 73,708 | |||||||||||
Common stock issued for services, shares | 52,209 | |||||||||||
Employees [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Exercise price | $ 1 | $ 1 | ||||||||||
Common stock issued for services | $ 72,292 | |||||||||||
Common stock issued for services, shares | 72,292 | |||||||||||
2016 Equity Incentive Plan [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Issuance of Common stock under Awards | 228,571 | |||||||||||
Shares available for grant | 2,500,000 | |||||||||||
2016 Equity Incentive Plan [Member] | Employees and Directors [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Shares available for grant | 2,242,000 | |||||||||||
Employee Stock Option [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock on the date of grant, term of the stock option | not exceed 10 years | |||||||||||
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 | |||||||||||
Series B Convertible Preferred Stock [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock authorized | 10,000,000 | 10,000,000 | ||||||||||
Preferred stock, shares issued | 15,000 | 15,000 | ||||||||||
Conversion price | $ 0.50 | $ 0.50 | ||||||||||
Conversion of Preferred stock | $ 1,000 | |||||||||||
Percentage of common stock excess | 4.99% | 4.99% | ||||||||||
Percentage of purchaser | 9.99% | 9.99% | ||||||||||
Series B Convertible Preferred Stock [Member] | SPA [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock, shares issued | 2,830 | |||||||||||
Exercise price | $ 1,000 | |||||||||||
Conversion of Preferred stock | $ 2,830,000 | |||||||||||
Warrant [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock, shares issued | 21,853,970 | |||||||||||
Common stock, shares outstanding | 21,853,970 | |||||||||||
Warrant [Member] | SPA [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Issuance of common stock, shares | 22,062,742 | |||||||||||
Series B Convertible Preferred Stock [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock authorized | 15,000 | 15,000 | 15,000 | |||||||||
Preferred stock, shares issued | 2,830 | 2,830 | 2,830 | 2,830 | ||||||||
Preferred stock, shares outstanding | 2,830 | 2,830 | 2,830 | 2,830 |
NOTE 15 - COMMON STOCK OPTION_3
NOTE 15 - COMMON STOCK OPTIONS AND WARRANTS (Schedule of Fair Value Assumptions) (Details) - Employee Stock Option [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate | 2.59% | |
Dividend yield | 0.00% | 0.00% |
Volatility of common stock | ||
Estimated annual forfeitures | ||
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term in years | 2 years 6 months | |
Volatility of common stock | 197.13% | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term in years | 2 years 9 months 3 days | |
Volatility of common stock | 207.27% |
NOTE 15 - COMMON STOCK PURCHASE
NOTE 15 - COMMON STOCK PURCHASE WARRANTS (Schedule of activity of warrants) (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Warrants | |||
Outstanding at the beginning of the year | 0 | ||
Warrants expired, forfeited, cancelled or exercised | (433,069) | ||
Outstanding at end of period | 0 | 2,242,000 | 0 |
Warrant [Member] | |||
Number of Warrants | |||
Outstanding at the beginning of the year | 25,216,332 | 218,764 | |
Warrants expired, forfeited, cancelled or exercised | (300,000) | (433,444) | |
Warrants issued with debt, debt modifications or services | 10,967,012 | ||
Warrants issued | 496,215 | 14,464,000 | |
Outstanding at end of period | 25,216,332 | 25,412,547 | 25,216,332 |
Exercisable at end of period | 25,412,547 | ||
Weighted Avg. Exercise Price | |||
Outstanding at the beginning of the year | $ 0.65 | $ 8.4 | |
Warrants expired, forfeited, cancelled or exercised | 233.45 | ||
Warrants issued with debt, debt modifications or services | 0.65 | ||
Warrants issued | 0.65 | ||
Outstanding at end of period | $ 0.65 | 0.68 | 0.65 |
Exercisable at end of period | $ 8.4 | $ 0.66 | $ 8.4 |
Remaining Contractual Life (Years) | |||
Outstanding at the beginning of the year | 4 years 7 months 6 days | 4 years 7 months 6 days | |
Warrants issued with debt, debt modifications or services | 4 years 7 months 6 days | ||
Warrant issued | 4 years 10 months 25 days | ||
Outstanding at end of period | 3 years 10 months 25 days | 4 years 10 months 25 days | |
Exercisable at end of period | 3 years 10 months 25 days |
NOTE 15 - COMMON STOCK PURCHA_2
NOTE 15 - COMMON STOCK PURCHASE WARRANTS (Narrative) (Details) - USD ($) | 3 Months Ended | ||||||
Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrant issued | 14,464,000 | 54,122 | 59,548 | 194,888 | |||
Warrants issued for debt/services | 8,452,180 | ||||||
Warrants expired | 433,069 | ||||||
Private Placement [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrant issued | 2,206,274 | ||||||
Shareholder [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrant exercised | $ 300,000 | ||||||
Proceeds from warrant exercise | $ 195,000 | ||||||
Six Shareholders [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrant issued | 496,215 | ||||||
Directors [Member] | 2016 Equity Incentive Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock options issued | 2,242,000 |
NOTE 16 - DERIVATIVE FINANCIA_3
NOTE 16 - DERIVATIVE FINANCIAL INSTRUMENTS (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | |
Derivative [Line Items] | ||||||
Warrant issued | 14,464,000 | 54,122 | 59,548 | 194,888 | ||
Derivative Financial Instruments [Member] | ||||||
Derivative [Line Items] | ||||||
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 | |||||
Derivative Financial Instruments [Member] | Minimum [Member] | ||||||
Derivative [Line Items] | ||||||
Common stock closing price | $ 1.05 | |||||
Derivative Financial Instruments [Member] | Maximum [Member] | ||||||
Derivative [Line Items] | ||||||
Common stock closing price | $ 8.75 |
NOTE 16 - DERIVATIVE FINANCIA_4
NOTE 16 - DERIVATIVE FINANCIAL INSTRUMENTS (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Minimum [Member] | ||
Derivative [Line Items] | ||
Expected Volatility | 0.00% | 37.00% |
Expected Remaining Term | 0 years | 4 years 26 days |
Risk Free Interest Rate | 0.00% | 1.80% |
Maximum [Member] | ||
Derivative [Line Items] | ||
Expected Volatility | 0.00% | 144.00% |
Expected Remaining Term | 0 years | 5 years |
Risk Free Interest Rate | 0.00% | 2.13% |
NOTE 17 - SUBSEQUENT EVENTS (De
NOTE 17 - SUBSEQUENT EVENTS (Details) - USD ($) | Apr. 03, 2019 | Apr. 01, 2019 | Mar. 14, 2019 | Jan. 29, 2019 | Jan. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 29, 2019 |
Subsequent Event [Line Items] | |||||||||||
Number of authorized shares | 500,000,000 | 500,000,000 | |||||||||
Share issuance in exchange of accrued salary owed, shares | 6,747 | 2,903 | |||||||||
Share issuance in exchange of accrued salary owed, value | $ 73,708 | ||||||||||
Repurchase of common stock | $ 1,459 | ||||||||||
Shareholder [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Proceeds from warrant exercise | $ 195,000 | ||||||||||
Warrant exercised | $ 300,000 | ||||||||||
Board of Directors [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Share issuance in exchange of accrued salary owed, shares | 52,209 | ||||||||||
Share issuance in exchange of accrued salary owed, value | $ 73,708 | ||||||||||
Subsequent Event [Member] | Shareholder [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Reduced exercise price | $ 0.55 | $ 0.55 | |||||||||
Strike price | $ 0.65 | 0.65 | |||||||||
Warrant to purchase common stock | 1,000,000 | ||||||||||
Proceeds from warrant exercise | $ 1,650,000 | ||||||||||
Warrant exercised | $ 684,581 | ||||||||||
Share issuance in exchange of accrued salary owed, shares | 376,520 | ||||||||||
Subsequent Event [Member] | Shareholder [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Warrant to purchase common stock | 500,000 | ||||||||||
Subsequent Event [Member] | Former Employee [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Share issuance in exchange of accrued salary owed, shares | 200,000 | ||||||||||
Subsequent Event [Member] | Spouse of Shareholder [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Market value of stock repurchased | $ 0.74 | ||||||||||
Repurchase of common stock | $ 1,599 | ||||||||||
Subsequent Event [Member] | Board of Directors [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Issurance of stock options | 120,000 | ||||||||||
Strike price | $ 1 | ||||||||||
Vesting period | 1 year |