Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jun. 26, 2020 | |
Document Information Line Items | ||
Entity Registrant Name | Spectrum Global Solutions, Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 2,639,381 | |
Amendment Flag | false | |
Entity Central Index Key | 0001413891 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity File Number | 000-53461 | |
Entity Incorporation, State or Country Code | NV | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash | $ 73,985 | $ 468,819 |
Accounts receivable, net of allowances of $470,303 and $504,785, respectively | 4,807,283 | 5,167,261 |
Contract assets | 237,862 | 461,681 |
Due from related party | 5,207,585 | |
Prepaid expenses and deposits | 169,925 | 200,119 |
Total current assets | 10,496,640 | 6,297,880 |
Property and equipment, net of accumulated depreciation of $1,069,416 and $1,058,973, respectively | 82,624 | 93,067 |
Goodwill | 1,905,822 | 1,905,822 |
Customer lists, net of accumulated amortization of $504,181 and $440,805, respectively | 2,426,648 | 2,490,024 |
Tradenames, net accumulated amortization of $235,580 and $212,226, respectively | 1,164,541 | 1,187,895 |
Operating lease right-of-use assets | 136,211 | 168,384 |
Other assets | 96,189 | 25,746 |
Total assets | 16,308,675 | 12,168,818 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 4,885,191 | 4,028,285 |
Contract liabilities | 705,396 | 704,544 |
Loans payable to related parties | 701,258 | 3,701,258 |
Loans payable, net of debt discount of $39,409 and $280,174, respectively | 347,862 | 3,578,386 |
Convertible debentures, current portion, net of discount of $501,346 and $352,055, respectively | 3,242,205 | 2,809,355 |
Factor financing | 2,844,381 | |
Derivative liability | 2,063,063 | 992,733 |
Warrant liability | 100,000 | 100,000 |
Operating lease liabilities | 141,688 | 173,351 |
Total current liabilities | 15,031,044 | 16,087,912 |
Long-term liabilities: | ||
Convertible debentures, net of current portion, net of debt discount of $0 and $98,176, respectively | 28,324 | |
Total long-term liabilities | 28,324 | |
Total liabilities | 15,031,044 | 16,116,236 |
Commitments and Contingencies | ||
Total mezzanine equity | 1,449,887 | 1,492,418 |
Stockholders’ Deficit: | ||
Common stock; $0.00001 par value; 750,000,000 shares authorized; 1,314,705 and 195,715 issued and 1,312,634 and 193,644 outstanding as of March 31, 2020 and December 31, 2019, respectively | 13 | 2 |
Additional paid-in capital | 34,174,562 | 25,255,291 |
Treasury stock, at cost | (277,436) | (277,436) |
Common stock subscribed | 74,742 | 74,742 |
Accumulated deficit | (34,144,137) | (30,492,435) |
Total stockholders' deficit | (172,256) | (5,439,836) |
Total liabilities and stockholders' deficit | 16,308,675 | 12,168,818 |
Series A Preferred Stock | ||
Long-term liabilities: | ||
Preferred stock, value | 965,357 | 1,007,888 |
Series B Preferred Stock | ||
Long-term liabilities: | ||
Preferred stock, value | $ 484,530 | $ 484,530 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts receivable, net of allowances (in Dollars) | $ 470,303 | $ 504,785 |
Accumulated depreciation (in Dollars) | 1,069,416 | 1,058,973 |
Customer lists (net of accumulated amortization) (in Dollars) | 504,181 | 440,805 |
Tradenames (net of accumulated amortization) (in Dollars) | 235,580 | 212,226 |
Loans payable, net of debt discount (in Dollars) | 39,409 | 280,174 |
Convertible debentures, net of discount (in Dollars) | 501,346 | 352,055 |
Convertible debentures, net of current portion (in Dollars) | $ 0 | $ 98,176 |
Common stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 1,314,705 | 195,715 |
Common stock, shares outstanding | 1,312,634 | 193,644 |
Series A Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 8,000,000 | 8,000,000 |
Preferred stock, shares issued | 899,427 | 899,427 |
Preferred stock, shares outstanding | 794,427 | 829,427 |
Series B Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 3,500 | $ 3,500 |
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 1,000 | 1,000 |
Preferred stock, shares outstanding | 1,000 | 1,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 7,130,480 | $ 11,335,732 |
Operating expenses: | ||
Cost of revenues | 6,619,826 | 8,824,165 |
Depreciation and amortization | 97,173 | 93,952 |
General and administrative | 946,131 | 1,044,706 |
Salaries and wages | 1,128,902 | 1,358,208 |
Total operating expenses | 8,792,032 | 11,321,031 |
(Loss) income from operations | (1,661,552) | 14,701 |
Other (expenses) income: | ||
(Loss) gain on settlement of debt | (190,902) | 164,467 |
Amortization of discounts on convertible debentures and loans payable | (388,982) | (661,352) |
Loss on change in fair value of derivatives | (813,630) | (369,391) |
Default and debt extension fees | (180,489) | |
Interest expense | (416,147) | (471,412) |
Total other (expense) income | (1,990,150) | (1,337,688) |
Net loss before income taxes | (3,651,702) | (1,322,987) |
Provision for income taxes | 9,600 | |
Net loss | $ (3,651,702) | $ (1,332,587) |
Net loss per share, basic and diluted: (in Dollars per share) | $ (5.06) | $ (33.96) |
Weighted average common shares outstanding, basic and diluted: (in Shares) | 722,364 | 39,240 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholder's Deficit (Unaudited) - USD ($) | Common stock | Additional paid-in capital | Common stock subscribed | Treasury stock | Accumulated deficit | Total |
Balances at Dec. 31, 2018 | $ 18,681,467 | $ 74,742 | $ (277,436) | $ (24,170,105) | $ (5,691,332) | |
Balances (in Shares) at Dec. 31, 2018 | 25,703 | |||||
Issuance of common stock to RDW Capital, LLC | 293,165 | 293,165 | ||||
Issuance of common stock to RDW Capital, LLC (in Shares) | 3,867 | |||||
Issuance of common stock to Silverback Capital | 119,663 | 119,663 | ||||
Issuance of common stock to Silverback Capital (in Shares) | 2,060 | |||||
Issuance of common stock to Virtual Capital | 321,425 | 321,425 | ||||
Issuance of common stock to Virtual Capital (in Shares) | 3,572 | |||||
Issuance of common stock to employees pursuant to the conversions of convertible debt | 308,000 | 308,000 | ||||
Issuance of common stock to employees pursuant to the conversions of convertible debt (in Shares) | 4,667 | |||||
Shares issued for services | 471,343 | 471,343 | ||||
Shares issued for services (in Shares) | 9,565 | |||||
Net loss for the period | (1,332,587) | (1,332,587) | ||||
Balances at Mar. 31, 2019 | 20,195,063 | 74,742 | (277,436) | (25,502,692) | (5,510,323) | |
Balances (in Shares) at Mar. 31, 2019 | 49,434 | |||||
Balances at Dec. 31, 2018 | 18,681,467 | 74,742 | (277,436) | (24,170,105) | (5,691,332) | |
Balances (in Shares) at Dec. 31, 2018 | 25,703 | |||||
Balances at Dec. 31, 2019 | $ 2 | 25,255,291 | 74,742 | (277,436) | (30,492,435) | (5,439,836) |
Balances (in Shares) at Dec. 31, 2019 | 195,715 | |||||
Issuance of common stock to M2B Funding | 12,151 | 12,151 | ||||
Issuance of common stock to M2B Funding (in Shares) | 1,112 | |||||
Issuance of common stock to CCAG Investments | 51,500 | 51,500 | ||||
Issuance of common stock to CCAG Investments (in Shares) | 9,755 | |||||
Issuance of common stock to FJ Vulis | 51,500 | 51,500 | ||||
Issuance of common stock to FJ Vulis (in Shares) | 9,755 | |||||
Issuance of common stock to Dominion Capital | 30,379 | 30,379 | ||||
Issuance of common stock to Dominion Capital (in Shares) | 2,778 | |||||
Issuance of common stock to GS Capital Partners | 64,257 | 64,257 | ||||
Issuance of common stock to GS Capital Partners (in Shares) | 12,859 | |||||
Issuance of common stock to WaveTech GmbH debtholders | $ 11 | 8,507,546 | 8,507,557 | |||
Issuance of common stock to WaveTech GmbH debtholders (in Shares) | 1,082,731 | |||||
Shares issued for services | 201,938 | 201,938 | ||||
Shares issued for services (in Shares) | ||||||
Net loss for the period | (3,651,702) | (3,651,702) | ||||
Balances at Mar. 31, 2020 | $ 13 | $ 34,174,562 | $ 74,742 | $ (277,436) | $ (34,144,137) | $ (172,256) |
Balances (in Shares) at Mar. 31, 2020 | 1,314,705 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Cash Flows [Abstract] | ||
Net loss | $ (3,651,702) | $ (1,332,587) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Loss on change in fair value of derivative liability | 813,630 | 369,391 |
Amortization of discounts on convertible debentures and loans payable | 388,982 | 661,352 |
Depreciation and amortization | 97,173 | 93,952 |
Amortization of operating right-of-use assets | 32,173 | 37,016 |
Amortization of operating right-of-use liabilities | (31,663) | (36,150) |
Stock-based compensation | 201,938 | 471,343 |
Loss (gain) on settlement of debt | 190,902 | (164,468) |
Default and debt extensions fees | 180,489 | |
Original issue discount | 20,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 359,978 | (1,131,653) |
Contract assets | 223,819 | (365,300) |
Prepaid expenses and deposits | 30,194 | 390,717 |
Other assets | (70,443) | 3,591 |
Accounts payable and accrued liabilities | 902,627 | 961,180 |
Contract liabilities | 852 | (523,083) |
Net cash used in operating activities | (331,051) | (544,699) |
Cash flows from investing activities: | ||
Net cash paid upon acquisition | (941,593) | |
Purchase of equipment | (52,540) | |
Net cash used in investing activities | (994,133) | |
Cash flows from financing activities: | ||
Proceeds from loans payable | 3,044,690 | 8,367,190 |
Repayments of loans payable | (6,515,979) | (6,147,609) |
Proceeds from loans payable to related parties | 299,972 | |
Proceeds from convertible debentures | 315,000 | |
Repayments of convertible debentures | (51,847) | (334,552) |
Proceeds from factoring financing | 4,685,390 | |
Repayments of factor financing | (1,841,009) | |
Net cash (used in) provided by financing activities | (63,783) | 1,885,029 |
Net (decrease) increase in cash | (394,834) | 346,197 |
Cash, beginning of period | 468,819 | 620,593 |
Cash, end of period | 73,985 | 966,790 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 56,847 | 206,467 |
Cash paid for income taxes | ||
Non-cash investing and financing activities: | ||
Common stock issued for conversion of convertible debentures | 64,257 | 1,042,254 |
Original issue discounts | 35,000 | 20,000 |
Original debt discount against derivative liability | 315,000 | 189,000 |
Common stock issued for conversion of Series A preferred stock | 42,530 | |
Addition to principal of convertible debenture due to defaults | 132,758 | |
Addition to principal of convertible debenture due to debt extension fee | 47,731 | |
Common stock issued upon conversion of WaveTech GmbH debt assumed by the Company | 8,507,557 | |
Issuance of common stock upon execution of convertible debenture agreements | 103,000 | |
Addition to derivative liability due to issuance of stock options | 44,700 | |
Net assets acquired in TNS acquisition | 935,834 | |
Convertible note issued in TNS acquisition | 665,000 | |
Third-party payment of third-party debt | $ 150,000 |
Organization and Going Concern
Organization and Going Concern | 3 Months Ended |
Mar. 31, 2020 | |
Organization and Going Concern [Abstract] | |
Organization and Going Concern | 1. Organization and Going Concern Spectrum Global Solutions, Inc., (the “Company”) (f/k/a Mantra Venture Group Ltd.) was incorporated in the State of Nevada on January 22, 2007 to acquire and commercially exploit various new energy related technologies through licenses and purchases. On December 8, 2008, the Company reincorporated in the province of British Columbia, Canada. On April 25, 2017, the Company entered into and closed on an Asset Purchase Agreement with InterCloud Systems, Inc. (“InterCloud”). Pursuant to the terms of the Asset Purchase Agreement, the Company purchased 80.1% of the assets associated with InterCloud’s AW Solutions, Inc., AW Solutions Puerto Rico, LLC, and Tropical Communications, Inc. (collectively “AWS” or the “AWS Entities”) subsidiaries. On November 15, 2017, the Company changed its name to “Spectrum Global Solutions, Inc.” and reincorporated in the state of Nevada. On February 14, 2018, the Company entered into an agreement with InterCloud providing for the sale, transfer, conveyance and delivery to the Company of the remaining 19.9% of the assets associated with InterCloud’s AWS business not already purchased by the Company. On February 6, 2018, the Company entered into and closed on a Stock Purchase Agreement with InterCloud Systems, Inc. (“InterCloud”). Pursuant to the terms of the Stock Purchase Agreement, the Company purchased all of the issued and outstanding capital stock and membership interests of ADEX Corporation, ADEX Puerto Rico LLC, ADEX Towers, Inc. and ADEX Telecom, Inc. (collectively “ADEX” or the “ADEX Entities”). The Company completed the acquisition on February 27, 2018. On May 18, 2018, the Company transferred all of its ownership interests in and to its subsidiaries Carbon Commodity Corporation, Mantra China Limited, Mantra Media Corp., Mantra NextGen Power Inc., Mantra Wind Inc., Climate ESCO Ltd. and Mantra Energy Alternatives Ltd. to an entity controlled by the Company’s former Chief Executive Officer, Larry Kristof. The new owner of the aforementioned entities assumed all liabilities and obligations with respect to such entities. On January 4, 2019, the Company entered into a Stock Purchase Agreement with InterCloud. Pursuant to the terms of the Purchase Agreement, InterCloud agreed to sell, and the Company agreed to purchase, all of the issued and outstanding capital stock of TNS, Inc. (“TNS”), an Illinois corporation. During September 2019, the Company formed ADEX Canada, which is included in the ADEX Entities. The Company’s AWS Entities are professional, multi-service line, telecommunications infrastructure companies that provide outsourced services to the wireless and wireline industry. The Company’s ADEX Entities are a leading outsource provider of engineering and installation services, staffing solutions and other services which include consulting to the telecommunications industry, service providers and enterprise customers domestically and internationally. The Company’s TNS subsidiary is a Chicago-based structured cabling and next-generation DAS design and installation firm that supports voice, data, video, security and multimedia systems within commercial office buildings, multi-building campus environments, high-rise buildings, data centers and other structures. These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of management to raise additional equity capital through private and public offerings of its common stock, and the attainment of profitable operations. As of March 31, 2020, the Company had an accumulated deficit of $34,144,137, and a working capital deficit of $4,534,404. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management requires additional funds over the next twelve months to fully implement its business plan. Management is currently seeking additional financing through the sale of equity and from borrowings from private lenders to cover its operating expenditures. There can be no certainty that these sources will provide the additional funds required for the next twelve months. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Condensed Financial Statements The accompanying unaudited interim consolidated financial statements of the Company should be read in conjunction with the consolidated financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Form 10-K for the year ended December 31, 2019. In the opinion of management, the accompanying financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year. Basis of Presentation/Principles of Consolidation These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. These consolidated financial statements include the accounts of the Company and its subsidiaries, the AWS Entities, the ADEX Entities, and TNS (from the date of acquisition, January 4, 2019). All of the subsidiaries are wholly-owned. All inter-company balances and transactions have been eliminated. Reverse Stock Split On April 14, 2020, the Company filed a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of the state of Nevada to effect a 1-for-300 reverse stock split with respect to the outstanding shares of the Company’s common stock. The Certificate of Amendment became effective on April 14, 2020 with the state of Nevada, and on April 20, 2020, Financial Industry Regulatory Authority, Inc. (FINRA) made the announcement of the reverse stock split. The reverse stock split was previously approved by the board of directors and the majority of stockholders of the Company. The reverse stock split was deemed effective at the open of business on April 21, 2020. As a result of the reverse stock split, every three hundred (300) shares of outstanding common stock of the Company as of April 14, 2020 were converted into one (1) share of common stock. Fractional shares resulting from the reverse stock split will be rounded up to the next whole number. All common share, warrant, stock option, and per share information in the consolidated financial statements gives retroactive effect to the 1-for-300 reverse stock split. There was no change to the number of authorized shares of common stock or preferred stock of the Company as a result of the reverse stock split. The par value of the Company’s common stock was unchanged at $0.00001 per share post-split. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for doubtful accounts, the estimated useful lives and recoverability of long-lived assets, equity component of convertible debt, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company records unbilled receivables for services performed but not billed. Management reviews a customer’s credit history before extending credit. The Company maintains an allowance for doubtful accounts for estimated losses. Estimates of uncollectible amounts are reviewed each period, and changes are recorded in the period in which they become known. Management analyzes the collectability of accounts receivable each period. This review considers the aging of account balances, historical bad debt experience, and changes in customer creditworthiness, current economic trends, customer payment activity and other relevant factors. Should any of these factors change, the estimate made by management may also change. The allowance for doubtful accounts at March 31, 2020 and December 31, 2019 was $470,303 and $504,785, respectively. Property and Equipment Property and equipment are stated at cost. The Company depreciates the cost of property and equipment over their estimated useful lives at the following annual rates: Automotive 3-5 years straight-line basis Computer equipment and software 3-7 years straight-line basis Leasehold improvements 5 years straight-line basis Office equipment and furniture 5 years straight-line basis Research equipment 5 years straight-line basis Goodwill Goodwill was generated through the acquisition of AWS, ADEX and TNS as the total consideration paid exceeded the fair value of the net assets acquired. The Company tests its goodwill for impairment at least annually on December 31st and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in the Company’s expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and the Company’s consolidated financial results. The Company tests goodwill by estimating fair value using a Discounted Cash Flow (“DCF”) model. The key assumptions used in the DCF model to determine the highest and best use of estimated future cash flows include revenue growth rates and profit margins based on internal forecasts, terminal value and an estimate of a market participant’s weighted-average cost of capital used to discount future cash flows to their present value. There were no impairment charges during the three months ended March 31, 2020 and 2019. Intangible Assets At March 31, 2020 and December 31, 2019, definite-lived intangible assets primarily consisted of tradenames and customer relationships which are being amortized over their estimated useful lives ranging from 5-35 years. The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives. For long-lived assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. There were no impairment charges during the three months ended March 31, 2020 and 2019. Long-lived Assets In accordance with ASC 360, “Property, Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. There were no impairment charges recorded during the three months ended March 31, 2020 and 2019. Foreign Currency Translation Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. The resulting foreign exchange gains and losses are recognized in income. The Company’s integrated foreign subsidiaries are financially or operationally dependent on the Company. The Company uses the temporal method to translate the accounts of its integrated operations into U.S. dollars. Monetary assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at average rates for the period, except for amortization, which is translated on the same basis as the related asset. The resulting foreign exchange gains or losses are recognized in income. Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “ Accounting for Income Taxes The Company conducts business, and files federal and state income, franchise or net worth, tax returns in Canada, the United States, in various states within the United States and the Commonwealth of Puerto Rico. The Company determines it’s filing obligations in a jurisdiction in accordance with existing statutory and case law. The Company may be subject to a reassessment of federal and provincial income taxes by Canadian tax authorities for a period of three years from the date of the original notice of assessment in respect of any particular taxation year. For Canadian and U.S. income tax returns, the open taxation years range from 2010 to 2019. In certain circumstances, the U.S. federal statute of limitations can reach beyond the standard three year period. U.S. state statutes of limitations for income tax assessment vary from state to state. Tax authorities of Canada and U.S. have not audited any of the Company’s, or its subsidiaries’, income tax returns for the open taxation years noted above. Significant management judgment is required in determining the provision for income taxes, and in particular, any valuation allowance recorded against the Company’s deferred tax assets. Deferred tax assets are regularly reviewed for recoverability. The Company currently has significant deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences, which should reduce taxable income in future periods. The realization of these assets is dependent on generating future taxable income. The Company follows the guidance set forth within ASC Topic 740, “ Income Taxes The Company received a tax notice from the Puerto Rican government requesting payment of taxes related to 2014. The amount due as of March 31, 2020 and December 31, 2019 was $156,711 plus penalties and interest of $126,700 for a total obligation due of $283,411. This tax assessment was included in accrued expenses at March 31, 2020 and December 31, 2019. Revenue Recognition Adoption of New Accounting Guidance on Revenue Recognition The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied. Contract Types The Company’s contracts fall under three main types: 1) unit-price, 2) fixed-price, and 3) time-and-materials. Unit-price contracts relate to services being performed and paid on a unit basis, such as per mile of construction completed. Fixed-price contracts are based on purchase order line items that are billed on individual invoices as the project progresses and milestones are reached. Time-and-materials contracts include employees working permanently at customer locations and materials costs incurred by those employees. A significant portion of the Company’s revenues come from customers with whom the Company has a master service agreement (“MSA”). These MSA’s generally contain customer specific service requirements. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company’s different revenue service types the performance obligation is satisfied at different times. For professional services revenue, the performance obligation is met when the work is performed. In certain cases this may be each day, or each week depending on the customer. For construction services, the performance obligation is met when the work is completed and the customer has approved the work. Contract assets include unbilled amounts for costs of services incurred on contracts with open performance obligations. These amounts are included in contract assets on the consolidated balance sheets. Contract liabilities include costs incurred and are included in contract liabilities on the consolidated balance sheets. Revenue Service Types The following is a description of the Company’s revenue service types, which include professional services and construction: ● Professional services are services provided to the clients where the Company delivers distinct contractual deliverables and/or services. Deliverables may include but are not be limited to: engineering drawings, designs, reports and specification. Services may include, but are not be limited to: consulting or professional staffing to support our client’s objectives. Consulting or professional staffing services may be provided remotely or on client premises and under their direction and supervision. ● Construction Services are services provided to the client where the Company may self-perform or subcontract services that require the physical construction of infrastructure or installation of equipment and materials. Disaggregation of Revenues The Company disaggregates its revenue from contracts with customers by service type, contract type, contract duration, and timing of transfer of goods or services. See the below tables: Revenue by service type Three months ended March 31, 2020 Three months ended March 31, 2019 Professional Services $ 5,367,311 $ 5,935,226 Construction 1,763,169 5,400,506 Total $ 7,130,480 $ 11,335,732 Revenue by contract duration Three months ended March 31, 2020 Three months ended March 31, 2019 Short-term $ 28,305 $ 65,430 Long-term 7,102,175 11,270,302 Total $ 7,130,480 $ 11,335,732 Revenue by contract type Three months ended March 31, 2020 Three months ended March 31, 2019 Unit-price $ 160,827 $ 3,238,658 Fixed-price 1,602,342 2,161,848 Time-and-materials 5,367,311 5,935,226 Total $ 7,130,480 $ 11,335,732 The Company also disaggregates its revenue by operating segment and geographic location (refer to Note 16, Segment Disclosures, for additional information). Accounts Receivable Accounts receivable include amounts from work completed in which the Company has billed. The amounts due are stated at their net estimated realizable value. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable. Contract Assets and Liabilities Contract assets include costs and services incurred on contracts with open performance obligations. These amounts are included in contract assets on the consolidated balance sheets. At March 31, 2020 and December 31, 2019, contract assets totaled $237,862 and $461,681, respectively. Contract liabilities include costs incurred and are included in contract liabilities on the consolidated balance sheets. At March 31, 2020 and December 31, 2019, contract liabilities totaled $705,396 and $704,544, respectively. Cost of Revenues Cost of revenues includes all direct costs of providing services under the Company’s contracts, including costs for direct labor provided by employees, services by independent subcontractors, operation of capital equipment (excluding depreciation and amortization), direct materials, insurance claims and other direct costs. Research and Development Costs Research and development costs are expensed as incurred. Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, “ Compensation – Stock Compensation The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASU 2018-07. The Company uses the Black-Scholes option pricing model to calculate the fair value of stock-based awards. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations over the requisite service period. Loss per Share The Company computes loss per share in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted loss per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing the loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of March 31, 2020 and December 31, 2019, respectively, the Company had 990,158 and 286,736 common stock equivalents outstanding. Leases The Company adopted FASB Accounting Standards Codification, Topic 842, Leases (“ASC 842”) electing the practical expedient that allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. For the comparative periods prior to adoption, the Company presented the disclosures which were required under ASC 840. The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months as of January 1, 2019. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, unamortized lease incentives provided by lessors, and restructuring liabilities, Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or result of operations Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivables. The Company maintains its cash balances with high-credit-quality financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits may be withdrawn upon demand and therefore bear minimal risk. The Company provides credit to customers on an uncollateralized basis after evaluating client creditworthiness. For the three months ended March 31, 2020, three customers accounted for 31%, 13% and 13%, respectively, of consolidated revenues for the period. In addition, amounts due from these customers represented 42%, 3% and 10%, respectively, of trade accounts receivable as of March 31, 2020. For the three months ended March 31, 2019, four customers accounted for 30%, 18%, 10% and 10%, respectively, of consolidated revenues for the period. In addition, amounts due from these customers represented 30%, 20%, 7% and 5%, respectively, of trade accounts receivable as of March 31, 2019. The Company’s customers are primarily located within the domestic United States of America and Puerto Rico. Revenues generated within the domestic United States of America accounted for approximately 98% and 97% of consolidated revenues for the three months ended March 31, 2020 and 2019, respectively. Revenues generated from customers in Puerto Rico accounted for approximately 2% and 3% of consolidated revenues for the three months ended March 31, 2020 and 2019, respectively. Fair Value Measurements The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by US generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is defined as follows: Level 1 – quoted prices for identical instruments in active markets; Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Financial instruments consist principally of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, loans payable and convertible debentures. Derivative liabilities are determined based on “Level 3” inputs, which are significant and unobservable and have the lowest priority. There were no transfers into or out of “Level 3” during the three months ended March 31, 2020 or the year ended December 31, 2019. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. The Company’s financial assets and liabilities carried at fair value measured on a recurring basis as of March 31, 2020 and December 31, 2019 consisted of the following: Total fair value at March 31, 2020 Quoted prices in active markets (Level 1) Quoted prices in active markets (Level 2) Quoted prices in active markets (Level 3) Derivative liability (1) $ 2,063,063 $ - $ - $ 2,063,063 Total fair value at December 31, 2019 Quoted prices in active markets (Level 1) Quoted prices in active markets (Level 2) Quoted prices in active markets (Level 3) Derivative liability (1) $ 992,733 $ - $ - $ 992,733 (1) The Company has estimated the fair value of these derivatives using the Monte-Carlo model and/or a Binomial Model. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Refer to Note 10, Derivative Liabilities, for additional information. Derivative Liabilities The Company accounts for derivative instruments in accordance with ASC Topic 815, “ Derivatives and Hedging Sequencing Policy Under ASC 815-40-35, the Company has adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuance of securities to the Company’s employees or directors are not subject to the sequencing policy. Reclassifications Certain balances in previously issued consolidated financial statements have been reclassified to be consistent with the current period presentation. The reclassification had no impact on total financial position, net income, or stockholders’ equity. |
Due From Related Party
Due From Related Party | 3 Months Ended |
Mar. 31, 2020 | |
Due From Related Party Disclosure [Abstract] | |
Due From Related Party | 3. Due From Related Party As of March 31, 2020, the Company had a due from related party balance of $5,207,585. This amount is the net of the amounts discussed below in the “Assumption of WaveTech GmbH debt” and “Loan with WaveTech GmbH, 8% interest” sections of this note. Assumption of WaveTech GmbH debt In connection with the share purchase agreement with WaveTech GmbH discussed in Note 15, Commitments and Contingencies, the Company assumed $7,531,309 of WaveTech GmbH debt. The amount included both principal and accrued interest. These note holders were issued new notes which were convertible into shares of the Company’s common stock. On February 18, 2020, these notes were converted into 1,082,731 shares at a conversion price of $7.80 per share. The value of the conversion was determined using the principal and accrued interest of the new notes at the time of conversion, which was $8,507,557. The Company did not record a gain or loss on the conversion as WaveTech GmbH is considered a related party (refer to Note 6, Related Party Transactions, for additional detail). In the event that the Company’s acquisition of WaveTech GmbH is terminated, this amount will be owed by WaveTech GmbH to the Company. The amount owed would be offset by the amounts owed by the Company to WaveTech GmbH discussed in the “Loan with WaveTech GmbH, 8% interest” section of this note. The share purchase agreement is not considered closed for accounting purposes because, as of the date of this report, the Series C preferred stock shares have not been issued (refer to Note 15, Commitments and Contingencies, for additional detail). Loan with WaveTech GmbH, 8% interest As of March 31, 2020, the loan with WaveTech GmbH discussed in Note 6, Related Party Transactions, is being netted against the amounts discussed in the “Assumption of WaveTech GmbH debt” section of this note. The balance as of December 31, 2019 was $3,000,000. During the three months ended March 31, 2020, the Company received an additional $299,972 from WaveTech GmbH. As of March 31, 2020, principal of $3,299,972 remains outstanding. The note is due on demand. In the event that the Company’s acquisition of WaveTech GmbH is terminated, the amount of this note would be used to offset amounts owed by WaveTech GmbH to the Company. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment as of March 31, 2020 and December 31, 2019 consisted of the following: March 31, December 31, 2020 2019 Computers and office equipment $ 349,271 $ 349,271 Equipment 382,140 382,140 Research equipment 143,129 143,129 Software 227,563 227,563 Vehicles 94,356 94,356 Vehicles under capital lease - - Total 1,196,459 1,196,459 Less: impairment (44,419 ) (44,419 ) Less: accumulated depreciation (1,069,416 ) (1,058,973 ) Equipment, net $ 82,624 $ 93,067 During the three months ended March 31, 2020 and 2019, the Company recorded depreciation expense of $10,443 and $7,018, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 5. Intangible Assets Intangible assets as of March 31, 2020 and December 31, 2019 consisted of the following: Cost Accumulated Amortization Impairment Net carrying value at March 31, 2020 Net carrying value at December 31, 2019 Customer relationship and lists $ 2,930,829 $ 504,181 $ - $ 2,426,648 $ 2,490,024 Trade names 1,400,121 235,580 - 1,164,541 1,187,895 Total intangible assets $ 4,330,950 $ 739,761 $ - $ 3,591,189 $ 3,677,919 During the three months ended March 31, 2020 and 2019, the Company recorded amortization expense of $86,730 and $86,934, respectively. The estimated future amortization expense for the next five years and thereafter is as follows: Year ending December 31, 2020 $ 260,191 2021 346,921 2022 346,921 2023 346,921 2024 346,921 Thereafter 1,943,314 Total $ 3,591,189 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 6. Related Party Transactions Unsecured Amounts Due to InterCloud As of March 31, 2020 and December 31, 2019, the Company owed $50,577 to InterCloud, which is non-interest bearing, unsecured, and due on demand and included in accounts payable and accrued liabilities. InterCloud Related Party Reclassification During May 2019, as a result of shares of common stock issued to InterCloud as a result of conversions of convertible debentures, the Company determined that InterCloud is a related party. The effective date of the reclassification was January 1, 2018. WaveTech GmbH Related Party Reclassification During November 2019, as a result of the Company acquiring 60% of the outstanding shares of WaveTech GmbH (refer to Note 15, Commitments and Contingencies, for additional detail), the Company determined that WaveTech GmbH is a related party. The effective date of the reclassification was January 1, 2019. The transaction is not considered closed for accounting purposes because as of the date of this report the Series C preferred stock shares have not been issued. Loans Payable to Related Parties As of March 31, 2020 and December 31, 2019, the Company had outstanding the following loans payable to related parties: March 31, December 31, 2020 2019 Promissory note issued to Roger Ponder, 10% interest, unsecured, due on demand $ 18,858 $ 18,858 Promissory note issued to Keith Hayter, 10% interest, unsecured, due on demand 130,000 130,000 Promissory note issued to Keith Hayter, 10% and 8% interest, unsecured, matures April 13, 2020 85,000 85,000 Promissory note issued to Keith Hayter, 8% interest, unsecured, due on demand 80,000 80,000 Promissory note issued to Keith Hayter, 10% interest, unsecured, matures August 11, 2020 170,000 170,000 Promissory note issued to InterCloud Systems, Inc., non-interest bearing, unsecured and due on demand 217,400 217,400 Loan with WaveTech GmbH, 8% interest, due on demand - * 3,000,000 Total $ 701,258 $ 3,701,258 * As of March 31, 2020, in connection with amounts owed to the Company from WaveTech GmbH, the loan with WaveTech GmbH is now being netted against amounts due from WaveTech GmbH (refer to Note 3, Due From Related Party, for additional detail). Promissory note issued to Roger Ponder, 10% interest, unsecured, matured on November 30, 2018 and extended to November 30, 2019 On November 30, 2017, the Company received $18,858 pursuant to a promissory note issued to the Chief Executive Officer of the Company. The note issued is unsecured, was due on November 30, 2018 and bears interest at a rate of 10% per annum. On November 30, 2018, the lender agreed to extend the maturity of the loan to November 30, 2019. The Company accounted for the modification in accordance with ASC 470-50 “Modifications and Extinguishments”. In accordance with ASC 470-50, the Company accounted for the extension as a modification and no gain or loss was recognized. The note matured on November 30, 2019 and is now due on demand. Promissory note issued to Keith Hayter, 10% interest, unsecured, matured on November 30, 2018 and extended to November 30, 2019 On November 30, 2017, the Company received $130,000 pursuant to a promissory note issued to the President of the Company. The note issued is unsecured, due on November 30, 2018 and bears interest at a rate of 10% per annum. On November 30, 2018, the lender agreed to extend the maturity of the loan to November 30, 2019. The Company accounted for the modification in accordance with ASC 470-50 “Modifications and Extinguishments”. In accordance with ASC 470-50, the Company accounted for the extension as a modification and no gain or loss was recognized. The note matured on November 30, 2019 and is now due on demand. Promissory note issued to Keith Hayter, 10% and 8% interest, unsecured, matures April 13, 2020 On April 13, 2018, the Company received $85,000 pursuant to a promissory note issued to the President of the Company. The note issued is unsecured, due on April 13, 2019 and bears interest at a rate of 8% per annum. At December 31, 2018, the amount of $85,000 was owed. On April 13, 2019, the note was amended to a maturity date of April 13, 2020 and an interest rate of 10%. The Company accounted for the modification in accordance with ASC 470-50 “Modifications and Extinguishments”. In accordance with ASC 470-50, the Company accounted for the extension as a modification and no gain or loss was recognized. The note matured on April 13, 2020 and is now due on demand. Promissory note issued to Keith Hayter, 8% interest, unsecured, matured October 1, 2019 On August 21, 2018, the Company received $80,000 pursuant to a promissory note issued to the President of the Company. The note issued is unsecured, was due on August 20, 2019 and bears interest at a rate of 8% per annum. On August 20, 2019, the note was amended to a maturity date of October 1, 2019 and an interest rate of 10%. The Company accounted for the modification in accordance with ASC 470-50 “Modifications and Extinguishments”. In accordance with ASC 470-50, the Company accounted for the extension as a modification and no gain or loss was recognized. The note matured on October 1, 2019 and is now due on demand. Promissory note issued to Keith Hayter, 10% interest, unsecured, matures August 11, 2020 On August 12, 2019, the Company received $170,000 pursuant to a promissory note issued to the President of the Company. The note issued is unsecured, is due on August 11, 2020 and bears interest at a rate of 10% per annum. Convertible promissory note, InterCloud Systems, Inc, 8% interest, unsecured, matured April 27, 2018 On April 27, 2017, the Company issued a convertible promissory note in the aggregate principal amount of $2,000,000. The interest on the outstanding principal due under the unsecured note accrued at a rate of 8% per annum. All principal and accrued interest under the unsecured note was due one year following the issue date of the unsecured note and was convertible into shares of common stock at a conversion price equal to 75% of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion. The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $1,174,000 resulted in a discount to the note payable of $943,299. On December 15, 2017, February 14, 2018, February 21, 2018, June 7, 2018, January 24, 2019, and March 15, 2019 the holder of the convertible promissory note entered into agreement to sell and assign a total of $105,000, $105,000, $105,000, $39,375, $100,000 and $100,000 of the outstanding principal, respectively to a third party. The Company approved and was bound by the assignment and sale agreement. As a result of the assignment, the conversion price for the total of $354,375 of notes assigned was equal to the lesser 70% of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion and $2,400.00. The Company accounted for this assignment in accordance with ASC 470-50 “Modifications and Extinguishments”. In accordance with ASC 470-50, the Company accounted for the assignment as a debt extinguishment and adjusted the fair value of the derivative to its fair value on the assignment date. On May 6, 2019, the remaining principal balance of $1,445,625 was converted into shares of the Company’s common stock through an automatic forced conversion. Convertible promissory note, InterCloud Systems, Inc, 1% interest, unsecured, matures August 16, 2019 On February 16, 2018, the Company issued InterCloud a convertible note with a principal amount of $793,894 to settle a contingent liability of $793,894 owed to InterCloud as a result of the acquisition of AWS. The note was originally due on August 16, 2019 and bore interest at 1% per annum. The note was convertible into common shares of the Company at a conversion price equal to the 80% of the lowest volume-weighted average price during the 5 trading days immediately preceding the date of conversion. The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging” (refer to Note 10, Derivative Liabilities, for additional information on embedded conversion features). The initial fair value of the conversion feature of $348,000 resulted in a discount to the note payable of $348,000. On August 16, 2019, the remaining principal balance of $793,894 was converted into shares of the Company’s common stock through an automatic forced conversion. Convertible promissory note, InterCloud Systems, Inc, 6% interest, unsecured, matured March 27, 2019 On February 27, 2018, the Company issued a convertible promissory note in the aggregate principal amount of $2,000,000. The interest on the outstanding principal due under the ADEX note accrued at a rate of 6% per annum. All principal and accrued interest under the ADEX note was due one year following the issue date of the ADEX note and was convertible into shares of common stock at a conversion price equal to of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion, but in no event ever lower than $300 (the “Floor”), unless the note was in default, at which time the Floor would have terminated. The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $2,455,000 resulted in a discount to the note payable of $639,000. On September 26, 2018, the holder of the convertible promissory note entered into agreement to sell and assign a total of $75,000 of the outstanding principal to a third party. The Company approved and was bound by the assignment and sale agreement. As a result of the assignment, the assigned note bore interest at 5% and the conversion price for the $75,000 of notes assigned was equal to the lesser 75% of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion and $2,400.00. On December 3, 2018, the holder of the convertible promissory note entered into agreement to sell and assign a total of $50,000 of the outstanding principal to a third party. The Company accounted for the assignments in accordance with ASC 470-50 “Modifications and Extinguishments”. In accordance with ASC 470-50, the Company accounted for the assignment as a debt extinguishment and adjusted the fair value of the derivative to its fair value on the assignment date. During the year ended December 31, 2019, the Company repaid $55,124 of principal outstanding. During the year ended December 31, 2019, the principal amount was reduced by $295,000 as a result of a working capital adjustment. On May 6, 2019, the remaining principal balance of $1,452,299 was converted into shares of the Company’s common stock through an automatic forced conversion. Promissory note issued to InterCloud Systems, Inc., non-interest bearing, unsecured and due on demand In connection with the acquisition of ADEX from InterCloud, $500,000 of the purchase price was retained by the Company to satisfy any outstanding liabilities of ADEX incurred prior to the closing date. During the year ended December 31, 2019, the Company repaid $57,600 of this amount. As of March 31, 2020, principal of $217,400 remains outstanding. Loan with WaveTech GmbH., 8% interest On July 15, 2019, the Company entered into a share purchase agreement with WaveTech GmbH, a German corporation (refer to Note 15, Commitments and Contingencies, for additional detail). In connection with the share purchase agreement, the Company was to receive $3,000,000 in cash at or before consummation of the transactions described in the agreement. The Company received $1,325,895 which was placed into escrow to satisfy the amounts outstanding to WaveTech Global, Inc (refer to Note 7, Loans Payable, for additional detail). The Company received an additional $1,664,083 during July 2019 to satisfy the $3,000,000 of cash per the share purchase agreement. The remaining $10,022 was recorded as a foreign exchange loss in the consolidated statement of operations for the year ended December 31, 2019. The loan bears interest at a rate of 8% per annum. On November 14, 2019, the Company acquired 60% of the outstanding shares of WaveTech GmbH (refer to Note 15, Commitments and Contingencies, for additional detail). As a result, the $1,325,895 in escrow was returned to the Company. As of March 31, 2020, in connection with amounts owed to the Company from WaveTech GmbH, the loan with WaveTech GmbH is now being netted against amounts due from WaveTech GmbH (refer to Note 3, Due From Related Party, for additional detail). |
Loans Payable
Loans Payable | 3 Months Ended |
Mar. 31, 2020 | |
Loans Payable [Abstract] | |
Loans Payable | 7. Loans Payable As of March 31, 2020 and December 31, 2019, the Company had outstanding the following loans payable: March 31, December 31, 2020 2019 Promissory note issued to J. Thacker, non-interest bearing, unsecured and due on demand $ 41,361 $ 41,361 Promissory note issued to S. Kahn, non-interest bearing, unsecured and due on demand 7,760 7,760 Promissory note issued to 0738856 BC ltd non-interest bearing, unsecured and due on demand 2,636 2,636 Promissory note issued to 0738856 BC Ltd, non-interest bearing, unsecured and due on demand 15,000 15,000 Promissory note issued to Bluekey Energy, non-interest bearing, unsecured and due on demand 7,500 7,500 Subscription amount due to T. Warkentin non-interest bearing, unsecured and due on demand 50,000 50,000 Promissory note issued to Old Main Capital LLC, 10% interest, unsecured and due on demand 12,000 12,000 Promissory note issued to Pawn Funding, non-interest bearing, matures July 24, 2020, net of debt discount of $11,260 and $31,365 60,459 94,928 Promissory note issued to RDM Capital Funding, non-interest bearing, matures July 24, 2020, net of debt discount of $28,149 and $79,087 151,146 237,319 Loan with Heritage Bank of Commerce, interest rate of prime plus 2%, secured by all assets of the Company, matures October 20, 2020, net of debt discount of $149,180 - 2,973,458 Promissory note issued to C6 Capital, non-interest bearing, matures April 15, 2020, net of debt discount of $20,272 - 136,424 Total $ 347,862 $ 3,578,386 Promissory note issued to J. Thacker, non-interest bearing, unsecured and due on demand The Company owed $41,361 ($53,300 Canadian dollars) to a non-related party as of March 31, 2020 and December 31, 2019. This promissory note is non-interest bearing, unsecured, and due on demand. Promissory note issued to S. Kahn, non-interest bearing, unsecured and due on demand The Company owed $7,760 ($10,000 Canadian dollars) to a non-related party as of March 31, 2020 and December 31, 2019. This promissory note is non-interest bearing, unsecured, and due on demand. Promissory note issued to 0738856 BC ltd non-interest bearing, unsecured and due on demand The Company owed $2,636 ($3,400 Canadian dollars) to a non-related party as of March 31, 2020 and December 31, 2019. This promissory note is non-interest bearing, unsecured, and due on demand. Promissory note issued to 0738856 BC Ltd, non-interest bearing, unsecured and due on demand The Company owed $15,000 to a non-related party as of March 31, 2020 and December 31, 2019. This promissory note is non-interest bearing, unsecured, and due on demand. Promissory note issued to Bluekey Energy, non-interest bearing, unsecured and due on demand The Company owed $7,500 to a non-related party as of March 31, 2020 and December 31, 2019. This promissory note is non-interest bearing, unsecured, and due on demand. Subscription amount due to T. Warkentin non-interest bearing, unsecured and due on demand In March 2012, the Company received $50,000 for the subscription of 167 shares of the Company’s common stock. During the year ended May 31, 2013, the Company and the subscriber agreed that the shares would not be issued and that the subscription would be returned. The subscription has been reclassified as a non-interest bearing demand loan until the funds are refunded to the subscriber. The Company owed $50,000 as of March 31, 2020 and December 31, 2019. Promissory note issued to Old Main Capital LLC, 10% interest, unsecured and due on demand On April 12, 2017, received $12,000 pursuant to a promissory note. The note issued is unsecured, due on demand and bears interest at a rate of 10% per annum. The Company owed $12,000 as of March 31, 2020 and December 31, 2019. Loan with Heritage Bank of Commerce, interest rate of prime plus 2%, secured by all assets of the Company, matures October 20, 2020 On October 10, 2018, the Company’s wholly-owned subsidiary, ADEX (the “Borrower”), entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Heritage Bank of Commerce (the “Lender”). Under the Loan and Security Agreement, the Borrower may borrow an aggregate outstanding amount not to exceed the lesser of up to (i) $5,000,000 or (ii) the Borrowing Base (as defined in the Loan and Security Agreement) through one or more advances through October 10, 2020 (the “Maturity Date”), subject to the Lender’s satisfactory annual review of the Borrower which is currently ongoing. On the Maturity Date, all advances must be repaid. The Lender may, in its sole discretion and upon the Borrower’s request, make advances to the Borrower after the Maturity Date subject to the terms and conditions under the Loan and Security Agreement. Part of the proceeds of the initial credit extension of the Loan and Security Agreement were used to pay off borrowings owed to Prestige Capital Corporation described in Note 8, Convertible Debentures. Interest is payable under the Loan and Security Agreement at a per annum rate equal to the Prime Rate (as defined in the Loan and Security Agreement) plus 2%. The Borrower’s obligations under the Loan and Security Agreement are secured by all assets of the Company. In addition, the Company issued a warrant (the “Warrant”) to the Lender to purchase an amount of shares of the Company’s common stock equal to $150,000 divided by the Warrant Price (as defined in the Warrant) at a price per share equal to 125% of the prior day’s closing price. The Loan and Security Agreement provides that upon the occurrence of an event of default, among other things, all outstanding amounts under the Loan and Security Agreement or any portion thereof becomes immediately due and payable. Events of default under the Loan and Security Agreement include, among other items, the Borrower’s failure to comply with certain affirmative and negative covenants relating to the Company, its securities and its financial condition. In connection with the financing, on October 10, 2018, the Company also issued a warrant to purchase 380 shares of the Company’s common stock at $375.00 per share for three years. The fair value of the warrants of $87,410 and $190,000 of debt issuance costs resulted in a discount to the note payable of $277,410. At December 31, 2018, the Company owed $3,483,015 pursuant to this agreement and will record accretion equal to the debt discount of $257,194 over the remaining term of the note. During the year ended December 31, 2019, the Company received an aggregate of $26,772,037 and repaid an aggregate of $27,132,642, for a net repaid amount of $360,605. At December 31, 2019, the Company owed $3,122,638 pursuant to this agreement and was to record accretion equal to the debt discount of $149,180 over the remaining term of the note. During the three months ended March 31, 2020, the Company received an aggregate of $6,167,328 and repaid an aggregate of $3,142,796. On February 11, 2020, pursuant to an assignment and consent agreement, Heritage sold, transferred and assigned to Bay View Funding all of Heritage’s right, title, and interest in the loan and security agreement (refer to Note 9, Factor Financing, for additional detail). As a result of the assignment, the Company recorded a loss on settlement of debt of $149,180 related to the remaining accretion of debt discount in the unaudited condensed consolidated statement of operations for the three months ended March 31, 2020. Loan with Libertas Funding LLC On January 4, 2019, the Company, together with its subsidiaries, AWS, ADEX, and TNS (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with Libertas Funding LLC, a Connecticut limited liability company (“Libertas”). Under the Financing Agreement, the Financing Parties sold to Libertas future receivables in an aggregate amount equal to $1,460,000 for a purchase price of $1,000,000. Pursuant to the terms of the Financing Agreement, the Company agreed to pay Libertas $31,602 each week based upon an anticipated 20% of its future receivables until such time as $1,460,000 had been paid, a period Libertas and the Financing Parties estimated to be approximately eleven months. In the event that the Financing Agreement was paid off earlier than eleven months, there was to be a discount to the sum owed. The Financing Agreement also contained customary affirmative and negative covenants, representations and warranties, and default and termination provisions. The Company used the proceeds of the Financing Agreement for the acquisition of TNS. On February 1, 2019, the Company fully repaid the Financing Agreement. As a result, the amount owed at December 31, 2019 was $0. Loan with WaveTech Global, Inc., matured April 28, 2019 On February 4, 2019, the Company entered into a share purchase agreement with WaveTech Global. This agreement included a promissory note in the principal amount of $1,325,895, which matured on April 28, 2019. On July 9, 2019, the share purchase agreement was terminated. As a result, the Company placed the amount due to WaveTech Global into escrow using cash received from the WaveTech GmbH share purchase agreement (refer to Note 15, Commitments and Contingencies for additional detail). In connection with the WaveTech GmbH transaction dated November 14, 2019, the escrow amount was returned to the Company. Loan with C6 Capital On August 16, 2019, the Company, together with its subsidiaries, AWS, ADEX, and TNS (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with C6 Capital. Under the Financing Agreement, the Financing Parties sold to C6 Capital future receivables in an aggregate amount equal to $337,500 for a purchase price of $250,000. The Company received cash of $242,500 and recorded a debt discount of $95,000. Pursuant to the terms of the Financing Agreement, the Company agreed to pay C6 Capital $10,045 each week based upon an anticipated 20% of its future receivables until such time as $337,500 had been paid, a period C6 Capital and the Financing Parties estimated to be approximately eight months. In the event that the Financing Agreement was paid off earlier than eight months, there was to be a discount to the sum owed. The Financing Agreement also contained customary affirmative and negative covenants, representations and warranties, and default and termination provisions. During the year ended December 31, 2019, the Company paid $180,804 of the original balance under the agreement. During the three months ended March 31, 2020, the Company paid $156,696 of the original balance under the agreement. As a result, the amount owed at March 31, 2020 was $0. The Company recorded a loss on settlement of debt of $1,490 to the unaudited condensed consolidated statement of operations for the three months ended March 31, 2020. Loan with Pawn Funding On December 10, 2019, the Company, together with its subsidiaries, AWS, ADEX, and TNS (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with Pawn Funding. Under the Financing Agreement, the Financing Parties sold to Pawn Funding future receivables in an aggregate amount equal to $135,000 for a purchase price of $100,000. The Company received cash of $97,000 and recorded a debt discount of $38,000. Pursuant to the terms of the Financing Agreement, the Company agreed to pay Pawn Funding $4,219 each week based upon an anticipated 15% of its future receivables until such time as $135,000 has been paid, a period Pawn Funding and the Financing Parties estimate to be approximately eight months. In the event that the Financing Agreement is paid off earlier than eight months, there is to be a discount to the sum owed. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions. During the year ended December 31, 2019, the Company paid $8,437 of the original balance under the agreement. During the three months ended March 31, 2020, the Company paid $54,844 of the original balance under the agreement. At March 31, 2020, the Company owed $71,719 pursuant to this agreement and will record accretion equal to the debt discount of $11,260 over the remaining term of the note. Loan with RDM Capital Funding On December 10, 2019, the Company, together with its subsidiaries, AWS, ADEX, and TNS (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with RDM Capital Funding. Under the Financing Agreement, the Financing Parties sold to RDM Capital Funding future receivables in an aggregate amount equal to $337,500 for a purchase price of $250,000. The Company received cash of $242,500 and recorded a debt discount of $95,000. Pursuant to the terms of the Financing Agreement, the Company agreed to pay RDM Capital Funding $10,574 each week based upon an anticipated 3% of its future receivables until such time as $337,500 had been paid, a period RDM Capital Funding and the Financing Parties estimated to be approximately eight months. In the event that the Financing Agreement was paid off earlier than eight months, there was to be a discount to the sum owed. The Financing Agreement also contained customary affirmative and negative covenants, representations and warranties, and default and termination provisions. During the year ended December 31, 2019, the Company paid $21,094 of the original balance under the agreement. During the three months ended March 31, 2020, the Company paid $137,111 of the original balance under the agreement. At March 31, 2020, the Company owed $179,295 pursuant to this agreement and was to record accretion equal to the debt discount of $28,149 over the remaining term of the note. During the period of April 1, 2020 through May 8, 2020, the Company repaid the balance in full. The final payment included the discount described above, which amounted to $62,652 (refer to Note 17, Subsequent Events, for additional detail). |
Convertible Debentures
Convertible Debentures | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Debentures | 8. Convertible Debentures As of March 31, 2020 and December 31, 2019, the Company had outstanding the following convertible debentures: March 31, December 31, 2020 2019 Convertible promissory note, Barn 11, 18% interest, unsecured, matured June 1, 2019 $ 594,362 $ 594,362 Convertible promissory note, Dominion Capital, 12% interest, unsecured, matures October 17, 2020, net of debt discount of $50,443 and 105,752 1,512,458 1,461,265 Convertible promissory note, Michael Roeske, 24% interest, unsecured, due on demand, net of debt discount of $0 and $3,512 145,000 112,488 Convertible promissory note, Joel Raven, 24% interest, unsecured, due on demand, net of debt discount of $0 and $8,658 455,000 355,342 Convertible promissory note, GS Capital Partners, LLC, 8% interest, secured. matures August 2, 2020, net of debt discount of $13,891 and $24,819 86,109 98,181 Convertible promissory note, SCS, LLC, 24% interest, unsecured, matured March 30, 2020, due on demand, net of debt discount of $0 and $13,005 63,788 38,025 Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures September 17, 2020, net of debt discount of $75,861 and $113,674 72,139 34,326 Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures January 22, 2021, net of debt discount of $40,750 and $53,051 27,750 15,449 Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures February 26, 2021, net of debt discount of $35,417 and $45,125 22,583 12,875 Convertible promissory note, GS Capital Partners, LLC, 8% interest, secured. matures October 24 2020, net of debt discount of $16,778 and $23,986 106,222 99,014 Convertible promissory note, Crown Bridge Partners, LLC, 10% interest, unsecured, matures November 21, 2020, net of debt discount of $46,898 and $58,648 28,102 16,352 Convertible promissory note, CCAG Investments, LLC, 8% interest, secured, matures June 30, 2020, net of debt discount of $110,654 64,346 - Convertible promissory note, FJ Vulis and Associates, LLC, 8% interest, secured, matures June 30, 2020, net of debt discount of $110,654 64,346 - Total 3,242,205 2,837,679 Less: Long-term portion of convertible debentures, net of debt discount - (28,324 ) Convertible debentures, current portion, net of debt discount $ 3,242,205 $ 2,809,355 Convertible promissory note, Barn 11, 18% interest, unsecured, matured June 1, 2019 On February 21, 2018, the Company issued a convertible note with a principal amount of $500,000 and a warrant with a term of three years to purchase up to 417 shares of common stock of the Company at an exercise price of $480.00 per share to Barn 11. The exercise price of the warrant was to reduce to 85% of the closing price of the Company’s common stock if the closing price of the Company’s common stock was less than $480.00 on July 31, 2018. The note was due on January 15, 2019, and in February 2019, the maturity date was extended to June 1, 2019, and bears interest at 6% per annum. The note is convertible into common shares of the Company at a conversion price equal to the lower of 80% of the lowest volume-weighted average price during the 5 trading days immediately preceding the date of conversion and $300.00 (the “Floor”), unless the note is in default, at which time the Floor terminates. The embedded conversion option and warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $571,079 and the warrant of $158,772 resulted in a discount to the note payable of $500,000 and an initial derivative expense of $229,851. On June 1, 2019, the Company was in default on the note. As a result of the default, a 15% premium was added to the balance owed, including all accrued interest. Subsequent to the default, the new principal balance of the note is $619,362, with interest now accruing at 18% per annum. Additionally, $466,000 was added to the derivative liability balance in connection with the default. During the year ended December 31, 2019, the Company paid $25,000 of principal. The Company owed $594,362 as of March 31, 2020. Convertible promissory note, Dominion Capital, 12% interest, unsecured, matures October 17, 2020 On April 17, 2019, Dominion Capital exchanged two notes into a new note (the “Exchange Note”) with a principal amount of $1,571,134. Interest accrues on the new note at 12% per annum. All principal and accrued interest under the Exchange Note is due on October 17, 2020 and is convertible into shares of the Company’s common stock. The conversion price in effect on the date such conversion is effected shall be equal to (i) initially, $30.00 or (ii) on or after the date of the closing of the next public or private offering of equity or equity-linked securities of the Company in which the Company receives gross proceeds in an amount greater than $100,000, one hundred and five percent (105%) of the price of the common stock issuable in the offering. While during the first six months that the Exchange Note is outstanding, only interest payments are due to the holder, beginning in October 2019, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under the Exchange Note. The Exchange Note includes customary events of default, including non-payment of the principal or accrued interest due on the Exchange Note. Upon an event of default, all obligations under the Exchange Note will become immediately due and payable. The Holder was granted a right to participate in future financing transactions of the Company while the Exchange Note remains outstanding. As a result of the beneficial conversion feature associated with the Dominion notes, $314,228 was added to additional paid-in capital during the year ended December 31, 2019. In connection with the exchange, the Company recorded a loss on settlement of debt of $904,469 on the consolidated statement of operations for the year ended December 31, 2019. The Company was to begin making principal payments in equal installments beginning on October 1, 2019. On October 22, 2019, the Company reached an agreement with Dominion Capital to postpone the principal payments. In exchange for the extension, the Company will pay to Dominion Capital an extension fee equal to 14% of the postponed payments. As a result of this agreement, the Company added $47,731 of principal to note during the year ended December 31, 2019 and the three months ended March 31, 2020. During the year ended December 31, 2019 and the three months ended March 31, 2020, the Company paid $51,848 of principal. The Company owed $1,562,901 as of March 31, 2020 and will record accretion equal to the debt discount of $50,443 over the remaining term of the note. Convertible promissory note issued in connection with the acquisition of TNS, Inc. On January 4, 2019, as part of the acquisition described in Note 3, Acquisition of TNS, Inc., the Company issued to InterCloud a convertible promissory note in the aggregate principal amount of $620,000 (the “Note”). The interest on the outstanding principal due under the Note accrued at a rate of 6% per annum. All principal and accrued interest under the Note was due January 30, 2020, and was convertible, at any time at InterCloud’s election, into shares of common stock of the Company at a conversion price equal to the greater of 75% of the lowest volume-weighted average price during the 10 trading days immediately preceding the date of conversion and $30.00. The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $189,000 resulted in a discount to the note payable of $144,000. On January 28, 2019, the holder of the convertible promissory note entered into agreement to sell and assign a total of $620,000 of the $620,000 outstanding principal to two third parties, with $186,000 and $434,000 of principal assigned to each party (refer to the “Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020” and “Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020” sections of this note for further detail). The Company approved and is bound by the assignment and sale agreement. Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020 On January 28, 2019, InterCloud assigned $186,000 of the note issued in connection with the acquisition of TNS to Michael Roeske. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Roeske converted $70,000 of principal of the note into shares of the Company’s common stock. The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $29,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $145,000 pursuant to this agreement. Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020 On January 28, 2019, InterCloud assigned $434,000 of the note issued in connection with the acquisition of TNS to Joel Raven. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Raven converted $70,000 of principal of the note into shares of the Company’s common stock The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $91,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $455,000 pursuant to this agreement. Convertible promissory note, GS Capital Partners, LLC, 8% interest, secured, matures August 2, 2020 On August 2, 2019, the Company entered into and closed on a Securities Purchase Agreement with GS Capital Partners, LLC, pursuant to which the Company issued to GS Capital Partners, LLC a senior secured convertible promissory note in the aggregate principal amount of $123,000 for an aggregate purchase price of $112,000. The interest on the outstanding principal due under the secured note accrued at a rate of 8% per annum. All principal and accrued but unpaid interest under the secured note was originally due on August 2, 2020. The secured note was convertible into shares of the Company’s common stock at 71% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. The conversion price had a floor of $3.00 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $28,000 resulted in an additional discount to the note payable of $28,000, for a total debt discount of $39,000. During the three months ended March 31, 2020, the holder of the note converted $23,000 of principal and $1,026 of accrued interest into shares of the Company’s common stock (refer to Note 11, Common Stock, for additional information). As a result of these conversions, the Company recorded a loss on settlement of debt of $40,232 to the unaudited condensed consolidated statement of operations for the three months ended March 31, 2020. At March 31, 2020, the Company owed $100,000 pursuant to this agreement and was to record accretion equal to the debt discount of $13,891 over the remaining term of the note. On April 30, 2020, the holder of the note converted the remaining $100,000 of principal and $5,742 of accrued interest into shares of the Company’s common stock (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, GS Capital Partners, LLC, 8% interest, unsecured, matures October 24, 2020 On October 24, 2019, the Company entered into and closed on a Securities Purchase Agreement with GS Capital Partners, LLC, pursuant to which the Company issued to GS Capital Partners, LLC a convertible promissory note in the aggregate principal amount of $123,000 for an aggregate purchase price of $112,000. The interest on the outstanding principal due under the note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the note is due on October 24, 2020. The note is convertible into shares of the Company’s common stock at 71% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. The conversion price has a floor of $3.00 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $20,000 resulted in an additional discount to the note payable of $20,000, for a total debt discount of $31,000. At March 31, 2020, the Company owed $123,000 pursuant to this agreement and will record accretion equal to the debt discount of $16,778 over the remaining term of the note. Convertible promissory note, SCS, LLC, 8% interest, unsecured, matured March 30, 2020 On September 1, 2019, the Company entered into and closed on a Securities Purchase Agreement with SCS, LLC, pursuant to which the Company issued to SCS, LLC an unsecured convertible promissory note in the aggregate principal amount of $51,030 in exchange for rent. The interest on the outstanding principal due under the unsecured note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the secured note and has a maturity date of March 30, 2020. The secured note is convertible into shares of the Company’s common stock at 75% of the lowest average VWAP in the 15 trading days prior to the conversion date. The conversion price has a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $29,000 resulted in a discount to the note payable of $29,000. The note matured on March 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $12,758. The interest also increased from 8% per annum to 24% per annum. At March 31, 2020, the Company owed $63,788 pursuant to this agreement. On June 19, 2020, the holder of the note began converting principal and accrued interest into shares of the Company’s common stock (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures September 17, 2020 On September 17, 2019, the Company entered into and closed on a Securities Purchase Agreement with Power Up Lending Group LTD. (“Power Up Lending”), pursuant to which the Company issued to Power Up Lending a convertible promissory note in the aggregate principal amount of $148,000 for an aggregate purchase price of $135,000. The Company received the cash on October 1, 2019. The interest on the outstanding principal due under the note accrued at a rate of 8% per annum. All principal and accrued but unpaid interest under the note was originally due on September 17, 2020. The note was convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. The conversion price had a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $159,000 resulted in an additional discount to the note payable of $135,000, for a total debt discount of $148,000. The remaining $24,000 of the initial fair value of the conversion feature was recorded as initial derivative expense on the consolidated statement of operations for the year ended December 31, 2019. At March 31, 2020, the Company owed $148,000 pursuant to this agreement and was to record accretion equal to the debt discount of $75,861 over the remaining term of the note. On April 1 2020, the holder of the note began converting principal into shares of the Company’s common stock. Between that date and June 9, 2020, the holder of the note converted the full principal amount of the note along with the accrued interest (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures January 22, 2021 On October 22, 2019, the Company entered into and closed on a Securities Purchase Agreement with Power Up Lending Group LTD. (“Power Up Lending”), pursuant to which the Company issued to Power Up Lending a convertible promissory note in the aggregate principal amount of $68,500 for an aggregate purchase price of $60,000. The interest on the outstanding principal due under the note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the note is due on January 22, 2021. The note is convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. The conversion price has a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $56,000 resulted in an additional discount to the note payable of $56,000, for a total debt discount of $64,500. At March 31, 2020, the Company owed $68,500 pursuant to this agreement and will record accretion equal to the debt discount of $40,751 over the remaining term of the note. On June 9, 2020, the holder of the note began converting principal into shares of the Company’s common stock (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures February 26, 2021 On November 27, 2019, the Company entered into and closed on a Securities Purchase Agreement with Power Up Lending Group LTD. (“Power Up Lending”), pursuant to which the Company issued to Power Up Lending a convertible promissory note in the aggregate principal amount of $58,000 for an aggregate purchase price of $50,000. The interest on the outstanding principal due under the note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the note is due on February 26, 2021. The note is convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. The conversion price has a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $43,000 resulted in an additional discount to the note payable of $43,000, for a total debt discount of $51,000. At March 31, 2020, the Company owed $58,000 pursuant to this agreement and will record accretion equal to the debt discount of $35,417 over the remaining term of the note. Convertible promissory note, Crown Bridge Partners, LLC, 10% interest, unsecured, matures November 21, 2020 On November 12, 2019, the Company entered into and closed on a Securities Purchase Agreement with Crown Bridge Partners, LLC, pursuant to which the Company issued to Crown Bridge Partners, LLC a convertible promissory note in the aggregate principal amount of $225,000 for an aggregate purchase price of $202,500. The Company received the first tranche of $75,000 on November 21, 2019 for an aggregate purchase price of $65,500. The Company also issued a warrant equal to the face amount of the note with a term of three years to purchase 2,500 shares of common stock at an exercise price of $30.00 per share. The interest on the outstanding principal due under the first tranche of the note accrues at a rate of 10% per annum. All principal and accrued but unpaid interest under the first tranche of the note is due on November 21, 2020. The first tranche of the note is convertible into shares of the Company’s common stock at 60% of the average of the three lowest VWAPs in the 20 trading days prior to and including the conversion date. The embedded conversion option and warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion option feature of $138,000 and warrant feature of $20,138 resulted in an additional discount to the note payable of $65,500, for a total debt discount of $75,000. The remaining $92,638 of the initial fair value of the conversion feature was recorded as initial derivative expense on the consolidated statement of operations for the year ended December 31, 2019. At March 31, 2020, the Company owed $75,000 pursuant to this agreement and will record accretion equal to the debt discount of $46,898 over the remaining term of the note. Convertible promissory note, CCAG Investments, LLC, 20% interest, secured, matures June 30, 2020 On February 7, 2020, the Company entered into and closed on a Securities Purchase Agreement with CCAG Investments, LLC, pursuant to which the Company issued to CCAG Investments, LLC a secured convertible redeemable note in the aggregate principal amount of $175,000 for an aggregate purchase price of $157,500, resulting in an original issue discount of $17,500. The Company also issued a warrant equal to 50% of the face amount of the note with a term of three years to purchase 9,723 shares of common stock at an initial exercise price of $9.00 per share. The interest on the outstanding principal due under the note accrued at a rate of 20% per annum. All principal and accrued but unpaid under the secured note was originally due on June 30, 2020. The note was convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. In connection with the issuance of the note, the Company also issued to CCAG Investments, LLC 9,755 shares of common stock (refer to Note 11, Common Stock, for additional detail). The embedded conversion option and warrants issued qualified for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature and warrants issued was $42,000 and $64,000, resulting in an additional discount to the note payable of $106,000. The shares issued with the note were valued at $51,500, for a total debt discount of $175,000. The Company had the option of repaying 120% of the principal balance if paid within 90 days of issuance, or 125% of the principal if paid greater than 90 days after issuance. On May 6, 2020, the Company repaid 120% of the principal balance (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, FJ Vulis and Associates LLC, 20% interest, secured, matures June 30, 2020 On February 7, 2020, the Company entered into and closed on a Securities Purchase Agreement with FJ Vulis and Associates, LLC, pursuant to which the Company issued to FJ Vulis and Associates, LLC a secured convertible redeemable note in the aggregate principal amount of $175,000 for an aggregate purchase price of $157,500, resulting in an original issue discount of $17,500. The Company also issued a warrant equal to 50% of the face amount of the note with a term of three years to purchase 9,723 shares of common stock at an initial exercise price of $9.00 per share. The interest on the outstanding principal due under the note accrued at a rate of 20% per annum. All principal and accrued but unpaid under the secured note was originally due on June 30, 2020. The note was convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. In connection with the issuance of the note, the Company also issued to FJ Vulis and Associates, LLC 9,755 shares of common stock (refer to Note 11, Common Stock, for additional detail). The embedded conversion option and warrants issued qualified for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature and warrants issued was $42,000 and $64,000, resulting in an additional discount to the note payable of $106,000. The shares issued with the note were valued at $51,500, for a total debt discount of $175,000. The Company had the option of repaying 120% of the principal balance if paid within 90 days of issuance, or 125% of the principal if paid greater than 90 days after issuance. On May 6, 2020, the Company repaid 120% of the principal balance (refer to Note 17, Subsequent Events, for additional detail). |
Factor Financing
Factor Financing | 3 Months Ended |
Mar. 31, 2020 | |
Factor Financing Disclosure [Abstract] | |
Factor Financing | 9. Factor Financing On February 11, 2020, pursuant to an assignment and consent agreement, Bay View Funding was sold, transferred and assigned all of Heritage’s right, title, and interest in the loan and security agreement with the Company’s wholly-owned subsidiary, ADEX, discussed in Note 7, Loans Payable. In connection with the agreement, the Company received $3,024,532 from Bay View Funding. This money was used to pay off the amounts owed to Heritage at the time of the assignment and consent agreement. The initial term of the factoring agreement is twelve months from the initial funding date. Under the factoring agreement, the Company’s ADEX subsidiary may borrow up to the lesser of $5,000,000 or an amount equal to the sum of all undisputed purchased receivables multiplied by the advance percentage, less any funds in reserve. ADEX will pay to Bay View Funding a factoring fee upon purchase of receivables by Bay View Funding equal to 0.75% of the gross face value of the purchased receivable for the first 30 day period from the date said purchased receivable is first purchased by Bay View Funding, and a factoring fee of 0.35% per 15 days thereafter until the date said purchased receivable is paid in full or otherwise repurchased by ADEX or otherwise written off by Bay View Funding within the write off period. ADEX will also pay a finance fee to Bay View Funding on the outstanding advances under the agreement at a floating rate per annum equal to the Prime Rate plus 3%. The finance rate will increase or decrease monthly, on the first day of each month, by the amount of any increase or decrease in the Prime Rate, but at no time will the finance fee be less than 7.75%. During the three months ended March 31, 2020, the Company received an aggregate of $4,685,390 and repaid an aggregate of $1,841,858. The Company owed $2,844,381 under the agreement as of March 31, 2020. |
Derivative Liabilities
Derivative Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | 10. Derivative Liabilities The embedded conversion options of the convertible debentures described in Note 8, Convertible Debentures, contain conversion features that qualify for embedded derivative classification. The fair value of the liability is re-measured at the end of every reporting period and the change in fair value is reported in the statement of operations as a gain or loss on change in fair value of derivatives. Derivative liabilities also include the fair value of the Company’s share purchase warrants and stock options discussed in Note 13, Share Purchase Warrants and Stock Options. As of March 31, 2020, the derivative liability balance of $2,063,062 was comprised of $1,225,000 of derivatives related to the Company’s convertible debentures, and $838,062 of derivatives related to the Company’s share purchase warrants and stock options. As of December 31, 2019, the derivative liability balance of $992,733 was comprised of $801,000 of derivatives related to the Company’s convertible debentures, and $191,732 of derivatives related to the Company’s share purchase warrants and stock options. The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities for the three months ended March 31, 2020 and the year ended December 31, 2019: March 31, December 31, 2020 2019 Balance at the beginning of the period $ 992,733 $ 3,166,886 Change in fair value of embedded conversion option 813,630 (1,843,935 ) Fair value of debt derivatives at issuance 84,000 - Fair value of warrant derivatives at issuance 128,000 - Fair value of option derivatives at issuance 44,700 - Conversion of derivative liability - (1,281,888 ) Original discount limited to proceeds of notes 376,500 Repayment of convertible note - (164,468 ) Derivative issued as part of acquisition - 189,000 Fair value of derivative liabilities in excess of notes proceeds received - 116,638 Addition to derivative due to default penalty - 466,000 Impact of note extinguishment - (32,000 ) Balance at the end of the period $ 2,063,063 $ 992,733 The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair values were determined by using Monte-Carlo model or a Binomial Model based on various assumptions. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations: Expected volatility Risk-free interest rate Expected dividend yield Expected life At December 31, 2019 230 - 304% 1.55 - 1.75% 0 % 0.25 - 1.16 At March 31, 2020 193 - 361% 0.04 - 1.75% 0 % 0.08 - 2.85 |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Common Stock | 11. Common Stock Authorized Shares On November 15, 2017, the Company revised its authorized share capital to increase the number of authorized common shares from 275,000,000 common shares with a par value of $0.00001, to 750,000,000 common shares with a par value of $0.00001. The reverse stock split discussed in Note 2, Significant Accounting Policies, did not change the number of authorized shares of the Company’s common stock. Treasury Stock The Company holds 2,071 common shares in treasury at a cost of $277,436. Issuance of Shares Pursuant to Conversion of Series A Preferred Stock On January 7, 2020, the Company issued 1,112 shares of common stock to M2B Funding upon the conversion of 10,000 shares of Series A preferred stock with a stated value of $1 per share. On February 11, 2020, the Company issued 2,778 shares of common stock to Dominion Capital upon the conversion of 25,000 shares of Series A preferred stock with a stated value of $1 per share. Issuance of Shares Pursuant to the Execution of New Convertible Debentures On February 7, 2020, the Company issued 9,755 shares of common stock to CCAG Investments, LLC upon the execution of a new convertible note described in Note 8, Convertible Debentures. On February 7, 2020, the Company issued 9,755 shares of common stock to FJ Vulis and Associates, LLC upon the execution of a new convertible note described in Note 8, Convertible Debentures. Issuance of Shares Pursuant to GS Capital Partners, LLC Convertible Debentures On February 12, 2020, the Company issued 1,647 shares of common stock to GS Capital Partners, LLC upon the conversion of $8,000 of principal and $323 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. On March 13, 2020, the Company issued 11,212 shares of common stock to GS Capital Partners, LLC upon the conversion of $15,000 of principal and $703 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. Issuance of Shares Pursuant to WaveTech GmbH Post-Closing Notes On February 18, 2020, the Company issued 1,082,731 shares of common stock to holders of WaveTech GmbH post-closing notes upon the conversion of $8,507,557 of principal and accrued interest pursuant to the post-closing notes described in Note 3, Due From Related Party. |
Preferred Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Preferred Stock | 12. Preferred Stock Series A On November 15, 2017, the Company created one series of the 20,000,000 preferred shares it is authorized to issue, consisting of 8,000,000 shares, to be designated as Series A preferred stock. On October 29, 2018, the Company made the first amendment to the Certificate of Designation of its Series A convertible preferred stock. This amendment updated the conversion price to be equal to the greater of 75% of the lowest VWAP during the ten trading day period immediately preceding the date a conversion notice is delivered or $120.00, subject to adjustment for any subdivision or combination of the Company’s outstanding shares of common stock. On August 16, 2019, the Company made the second amendment to the Certificate of Designation of its Series A convertible preferred stock. As a result of this amendment, the Company recorded a deemed dividend of $488,072 for the year ended December 31, 2019 in accordance with ASC 260-10-599-2. Subsequent to the second amendment, the principal terms of the Series A preferred stock shares were as follows: Voting rights Dividend rights Conversion rights Liquidation rights In accordance with ASC 480 Distinguishing Liabilities from Equity Holders of Series A preferred stock shares began converting into shares of common stock during May 2018 (refer to Note 11, Common Stock, for additional detail). On April 8, 2020, the Company made the third amendment to the Certificate of Designation of its Series A preferred stock, which lowered the fixed conversion price and the conversion price floor to $3.00 per share (refer to Note 17, Subsequent Events, for additional detail). On June 18, 2020, the Company made the fourth amendment to the Certificate of Designation of its Series A preferred stock, which lowered the fixed conversion price to $0.20 per share and the conversion price floor to $0.01 per share (refer to Note 17, Subsequent Events, for additional detail). Series B On April 16, 2018, the Company designated 1,000 shares of Series B preferred stock of the Company with a stated value of $3,500 per share. The Series B preferred stock is neither redeemable nor convertible into common stock. The principal terms of the Series B preferred stock shares are as follows: Issue Price - Redemption - Dividends - Preference of Liquidation - Voting - Conversion - In accordance with ASC 480 Distinguishing Liabilities from Equity Series C On November 14, 2019, the Company designated 9,000,000 shares of Series C preferred stock of the Company with a stated value of $0.00001 per share. The principal terms of the Series C preferred stock shares are as follows: Issue Price Redemption Dividends Preference of Liquidation Voting Conversion For purposes hereof, a “Triggering Event” shall include any liability arising from a breach of the representations or warranties of WaveTech GmbH (as defined below) contained in the share purchase agreement dated July 15, 2019 and all amendments thereto (as amended, the “SPA”), by and between the Company and WaveTech GmbH, a corporation organized under the laws of the Republic of Germany. “Closing Date” shall have the meaning ascribed to the term in the SPA. “Strike Price” shall mean the closing price per share of the Company’s common stock on the trading day immediately preceding the Series C Conversion Date. On April 14, 2020, the Company entered into Amendment Number 2 of the share purchase agreement with WaveTech GmbH. As a result of the amendment, certain terms of the Company’s Series C preferred stock were changed (refer to Note 17, Subsequent Events, for additional detail). As of the date of this report, the Series C shares have not been issued. |
Share Purchase Warrants and Sto
Share Purchase Warrants and Stock Options | 3 Months Ended |
Mar. 31, 2020 | |
Share Purchase Warrants [Abstract] | |
Share Purchase Warrants and Stock Options | 13. Share Purchase Warrants and Stock Options From time to time, the Company issues share purchase warrants and stock options, which are classified as liabilities. The total fair value of the Company’s share purchase warrants and stock options was $838,062 and $191,732 as of March 31, 2020 and December 31, 2019, respectively. This amount is included in derivative liabilities on the consolidated balance sheets. The valuation methodology, including the assumptions used in the valuation, are discussed in Note 10, Derivative Liabilities. The weighted-average remaining life on the share purchase warrants as of March 31, 2020 and December 31, 2019 was 1.6 years and 1.3 years, respectively. The stock options outstanding at March 31, 2020 and December 31, 2019 were not subject to any vesting terms. The following table summarizes the activity of share purchase warrants for the three months ended March 31, 2020: Number of warrants Weighted average exercise price Balance at December 31, 2019 14,075 $ 331.46 Issued 64,134 253.57 Expired - - Balance at March 31, 2020 78,209 $ 267.59 As of March 31, 2020, the following share purchase warrants were outstanding: Number of warrants Exercise price Issuance Date Expiry date 459 1,530.00 28-04-2017 28-04-2020 834 300.00 27-06-2017 27-06-2020 52,506 * 360.00 14-02-2018 13-02-2021 417 480.00 21-02-2018 21-02-2021 1,667 300.00 17-05-2018 17-05-2020 380 324.00 10-10-2018 10-10-2021 2,500 30.00 21-11-2019 21-11-2022 9,723 9.00 07-02-2020 07-02-2023 9,723 9.00 07-02-2020 07-02-2023 78,209 * This warrant is convertible into 4% of the number of common shares of the Company outstanding. At March 31, 2020, it is 4% of the 1,312,634 shares outstanding as of that date. The following table summarizes the activity of stock options for the three months ended March 31, 2020: Number of stock options Weighted average exercise price Balance at December 31, 2019 5,000 $ 9.00 Issued - - Expired - - Balance at March 31, 2020 5,000 $ 9.00 As of March 31, 2020, the following stock options were outstanding: Number of stock options Exercise price Issuance Date Expiry date 5,000 9.00 11/25/2019 11/25/2021 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | 14. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases The depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term. The Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The Company used the incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date. The following table sets forth the operating lease right of use (“ROU”) assets and liabilities as of March 31, 2020: March 31, December 31, 2020 2019 Operating lease assets $ 136,211 $ 168,384 Operating lease liabilities: Current operating lease liabilities 141,688 173,351 Total operating lease liabilities $ 141,688 $ 173,351 Expense related to leases is recorded on a straight-line basis over the lease term, including rent holidays. During the three months ended March 31, 2020 and 2019, the Company recognized operating lease expense of $52,308 and $48,175, respectively. Operating lease costs are included within selling, administrative and other expenses on the consolidated statements of operations. During the three months ended March 31, 2020, short-term lease costs were $50,073 and $78,035, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $51,799 and $47,309 for the three months ended March 31, 2020 and 2019, respectively, and this amount is included in operating activities in the consolidated statements of cash flows. During the three months ended March 31, 2020 and 2019, respectively, the Company reduced its operating lease liabilities by $31,662 and $36,150 for cash paid. The operating lease liabilities as of March 31, 2020 reflect a weighted average discount rate of 58%. The weighted average remaining term of the leases is 2.75 years. Remaining lease payments as of March 31, 2020 are as follows: Year ending December 31, 2020 $ 70,203 2021 95,914 2022 86,681 2023 21,330 Total lease payments 274,128 Less: imputed interest (132,440 ) Total $ 141,688 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies Leases The Company leases certain of its properties under leases that expire on various dates through 2023. Some of these agreements include escalation clauses and provide for renewal options ranging from one to five years. Leases with an initial term of 12 months or less and immaterial leases are not recorded on the balance sheet (refer to Note 14, Leases, for amounts expensed during the three months ended March 31, 2020 and 2019). WaveTech GmbH Share Purchase Agreement On July 15, 2019, the Company entered into a share purchase agreement with WaveTech GmbH, a German corporation. The merger of WaveTech GmbH into the Company shall be effected through a sale and exchange of shares and cash. Pursuant to the share purchase agreement, in exchange for shares of common stock of the Company, the Company will acquire all right, title and interest in all of the issued and outstanding shares of stock of WaveTech GmbH in exchange for the issuance of the Company’s Series C preferred stock as well as the assumption by the Company of $8,507,557 of WaveTech GmbH debt (refer to Note 3, Due From Related Party, for additional detail). The Company was to receive $3,000,000 in cash at or before consummation of the transactions contemplated by the share purchase agreement (the “Transactions”). Upon consummation of the Transactions, the current WaveTech GmbH shareholders will beneficially own a majority of the outstanding shares of the Company. The consummation of the Transactions is also subject to the satisfaction or waiver (if permitted by law) of certain closing conditions, including, among other things, (i) the accuracy of the representations and warranties of the parties in all material respects and (ii) the performance of and compliance with the covenants of the parties in all material respects. The parties are required to use commercially reasonable efforts to cause to be taken and to do or cause to be done all actions and things as are necessary under the terms of the share purchase agreement or under applicable law, in order to consummate the Transactions. The parties are also required to, among other things, cooperate in all respects with each other in connection with any filing or submission to any governmental authority in connection with the Transactions. The share purchase agreement also contains certain termination rights for both the Company and WaveTech GmbH, including that the Company or WaveTech GmbH may terminate the share purchase agreement if WaveTech GmbH has not obtained executed assignment agreements from its shareholders holding an aggregate of (i) fifty one percent (51%) of the issued and outstanding shares of WaveTech GmbH by the date that is ninety (90) days following the date of the share purchase agreement and (ii) ninety percent (90%) of the issued and outstanding shares of WaveTech GmbH by March 31, 2020. As of the date of this report, the executed assignment agreements had not been obtained and neither party had chosen to terminate the deal. On November 14, 2019, the Company entered into Amendment Number 1 of the share purchase agreement and acquired approximately 60% of the outstanding shares of WaveTech GmbH. In connection with the Company acquiring these shares, the Company’s board appointed Dag Valand to be a director of the Company and appointed Silas Poel to be the Company’s Chief Operating Officer and director. Mr. Valand is the CEO and co-founder of WaveTech GmbH and Mr. Poel is the Chief Operating Officer of WaveTech GmbH. Additionally, on February 19, 2020, the Company’s board appointed Brynjar Meling to be a director of the Company. Mr. Meling previously served as a director of WaveTech GmbH. The Company determined that the acquisition had not been completed for accounting purposes as of the three months ended March 31, 2020 because the Series C preferred stock shares have not yet been issued. As of December 31, 2019, the Company had received $2,989,978 in cash from WaveTech GmbH. Additionally, the Company recorded a foreign exchange loss of $10,022 in the consolidated statement of operations for the year ended December 31, 2019. During the three months ended March 31, 2020, the Company received an additional $299,972 in cash from WaveTech GmbH. This $3,299,972 is included in due from related party as of March 31, 2020 (refer to Note 3, Due From Related Party, for additional detail). Additionally, as of the date of this report, the Series C preferred stock shares have not been issued. On April 14, 2020, the Company entered into Amendment Number 2 of the share purchase agreement (refer to Note 17, Subsequent Events, for additional detail). Between the period of April 1, 2020 through June 25, 2020, the Company obtained additional executed assignment agreements from shareholders holding an aggregate of 30% of the issued and outstanding shares of WaveTech GmbH (refer to Note 17, Subsequent Events, for additional detail). As a result, as of the date of this report, the Company has obtained executed assignment agreements from shareholders holding an aggregate of 90% of the issued and outstanding shares of WaveTech GmbH. Oasis Capital, LLC Equity Purchase Agreement and Registration Rights Agreement On August 29, 2019, the Company entered into an equity purchase agreement and registration rights agreement with Oasis Capital, LLC, a Puerto Rico limited liability Company. Under the terms of the equity purchase agreement, Oasis Capital agreed to purchase from the Company up to $2,500,000 of the Company’s common stock upon effectiveness of a registration statement on Form S-1 (the “Registration Statement”) filed with the SEC and subject to certain limitations and conditions set forth in the equity purchase agreement. Following effectiveness of the Registration Statement, and subject to certain limitations and conditions set forth in the equity purchase agreement, the Company shall have the discretion to deliver put notices to Oasis Capital and Oasis Capital will be obligated to purchase shares of the Company’s common stock, par value $0.00001 per share based on the investment amount specified in each put notice. The maximum amount that the Company shall be entitled to put to Oasis Capital in each put notice shall not exceed the lesser of $250,000 or two hundred percent (200%) of the average daily trading volume of the Company’s common stock during the ten (10) trading days preceding the put. Pursuant to the equity purchase agreement, Oasis Capital and its affiliates will not be permitted to purchase and the Company may not put shares of the Company’s common stock to Oasis Capital that would result in Oasis Capital’s beneficial ownership of the Company’s outstanding common stock exceeding 9.99%. The price of each put share shall be equal to eighty five percent (85%) of the market price (as defined in the equity purchase agreement). Puts may be delivered by the Company to Oasis Capital until the earlier of (i) the date on which Oasis Capital has purchased an aggregate of $2,500,000 worth of common stock under the terms of the equity purchase agreement, (ii) August 29, 2022, or (iii) written notice of termination delivered by the Company to Oasis Capital, subject to certain equity conditions set forth in the equity purchase agreement. As of the date of this report, the Company has not received the funds described in the equity purchase agreement and has not filed the Registration Statement with the SEC. |
Segment Disclosures
Segment Disclosures | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Disclosures | 16. Segment Disclosures During the three months ended March 31, 2020 and 2019, the Company had two operating segments including: ● AWS/ADEX/TNS, which is comprised of the AWS Entities, the ADEX Entities, and TNS. ● Spectrum Global Solutions (SGS), which consists of the rest of the Company’s operations. Factors used to identify the Company’s reportable segments include the organizational structure of the Company and the financial information available for evaluation by the chief operating decision-maker in making decisions about how to allocate resources and assess performance. The Company’s operating segments have been broken out based on similar economic and other qualitative criteria. The Company operates the SGS reporting segment in one geographical area (the United States) and the AWS/ADEX/TNS operating segment in two geographical areas (the United States and Puerto Rico). Financial statement information by operating segment for the three months ended March 31, 2020 is presented below: Three Months Ended March 31, 2020 Spectrum Global AWS/ADEX/ TNS Total Net sales $ - $ 7,130,480 $ 7,130,480 Operating loss (745,562 ) (915,990 ) (1,661,552 ) Interest expense 341,226 74,921 416,147 Depreciation and amortization - 97,173 97,173 Total assets as of March 31, 2020 5,194,959 11,113,716 16,308,675 Geographic information as of and for the three months ended March 31, 2020 is presented below: Revenues For The Three Months Ended March 31, 2020 Long-lived Assets as of March 31, 2020 Puerto Rico $ 170,512 $ 9,268 United States 6,959,968 5,802,767 Consolidated total 7,130,480 5,812,035 Financial statement information by operating segment for the three months ended March 31, 2019 and as of December 31, 2019 is presented below: Three Months Ended March 31, 2019 Spectrum Global AWS/ADEX Total Net sales $ - $ 11,335,732 $ 11,335,732 Operating (loss) income (954,965 ) 969,666 14,701 Interest expense 399,555 71,857 471,412 Depreciation and amortization - 93,952 93,952 Total assets as of December 31, 2019 11,783 12,157,035 12,168,818 Geographic information for the three months ended March 31, 2019 and as of December 31, 2019 is presented below: Revenues For The Three Months Ended March 31, 2019 Long-lived Assets as of December 31, 2019 Puerto Rico $ 310,478 $ 9,698 United States 11,025,254 5,861,240 Consolidated total 11,335,732 5,870,938 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events COVID-19 Beginning in early 2020, there has been an outbreak of coronavirus (“COVID-19”), initially in China and which has spread globally. The full extent of the outbreak, related business and travel restrictions and changes to behavior intended to reduce its spread are evolving. Therefore, the full extent to which COVID-19 may impact Company’s results of operations, liquidity or financial position is uncertain. Management continues to monitor the impact that the COVID-19 pandemic is having on the Company and the economies in which the Company operates. On April 21, April 27, 2020, and May 12, 2020, our AWS, ADEX, and AWS PR subsidiaries received $672,400, $2,682,125, and $78,000, respectively (the “PPP Funds”). AWS entered into a loan agreement with Iberia Bank, ADEX entered into a loan agreement with Heritage Bank of Commerce, and AWS PR entered into a loan agreement with Banco Popular de Puerto Rico. These loan agreements were pursuant to the CARES Act. The CARES Act was established in order to enable small businesses to pay employees during the economic slowdown caused by COVID-19 by providing forgivable loans to qualifying businesses for up to 2.5 times their average monthly payroll costs. The amount borrowed under the CARES Act is eligible to be forgiven provided that (a) the Company uses the PPP Funds during the eight week period after receipt thereof, and (b) the PPP Funds are only used to cover payroll costs (including benefits), rent, mortgage interest, and utility costs. The amount of loan forgiveness will be reduced if, among other reasons, the Company does not maintain staffing or payroll levels. Principal and interest payments on any unforgiven portion of the PPP Funds (the “PPP Loan”) will be deferred for six months and will accrue interest at a fixed annual rate of 1.0% and carry a two year maturity date. There is no prepayment penalty on the CARES Act Loan. Issuance of Shares Pursuant to Power Up Lending Group LTD. Convertible Debentures On April 1, 2020, the Company issued 5,715 shares of common stock to Power Up Lending Group LTD. upon the conversion of $12,000 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. On April 13, 2020, the Company issued 9,196 shares of common stock to Power Up Lending Group LTD. upon the conversion of $16,000 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. On April 16, 2020, the Company issued 8,621 shares of common stock to Power Up Lending Group LTD. upon the conversion of $15,000 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. On April 16, 2020, the Company issued 8,621 shares of common stock to Power Up Lending Group LTD. upon the conversion of $15,000 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. On April 20, 2020, the Company issued 12,122 shares of common stock to Power Up Lending Group LTD. upon the conversion of $20,000 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. On April 30, 2020, the Company issued 58,434 shares of common stock to Power Up Lending Group LTD. upon the conversion of $15,000 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. On May 12, 2020, the Company issued 38,956 shares of common stock to Power Up Lending Group LTD. upon the conversion of $10,000 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. On May 13, 2020, the Company issued 77,912 shares of common stock to Power Up Lending Group LTD. upon the conversion of $20,000 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. On May 20, 2020, the Company issued 113,379 shares of common stock to Power Up Lending Group LTD. upon the conversion of $20,000 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. On June 9, 2020, the Company issued 62,359 shares of common stock to Power Up Lending Group LTD. upon the conversion of $5,000 of principal and $5,520 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. On June 9, 2020, the Company issued 71,132 shares of common stock to Power Up Lending Group LTD. upon the conversion of $12,000 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. On June 12, 2020, the Company issued 118,554 shares of common stock to Power Up Lending Group LTD. upon the conversion of $20,000 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. On June 16, 2020, the Company issued 118,554 shares of common stock to Power Up Lending Group LTD. upon the conversion of $20,000 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. On June 26, 2020, the Company issued 118,777 shares of common stock to Power Up Lending Group LTD. upon the conversion of $16,500 of principal and $2,540 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. Dominion Capital Modification On April 2, 2020, in connection with the convertible debenture outstanding to Dominion Capital, the Company paid a $20,000 modification fee in order to avoid an event of default under the note and receive payment forbearance for a period of 30 days. Issuance of Shares Pursuant to Conversion of Series A Preferred Stock On April 9, 2020, the Company issued 8,334 shares of common stock to Dominion Capital upon the conversion of 25,000 shares of Series A preferred stock with a stated value of $1 per share. On April 29, 2020, the Company issued 8,334 shares of common stock to Dominion Capital upon the conversion of 25,000 shares of Series A preferred stock with a stated value of $1 per share. On June 22, 2020, the Company issued 85,000 shares of common stock to M2B Funding upon the conversion of 17,000 shares of Series A preferred stock with a stated value of $1 per share. On June 25, 2020, the Company issued 75,000 shares of common stock to Dominion Capital upon the conversion of 15,000 shares of Series A preferred stock with a stated value of $1 per share. Amendments to the Certificate of Designation of the Company’s Series A Preferred Stock On April 8, 2020, the Company made the third amendment to the Certificate of Designation of its Series A preferred stock which lowered the fixed conversion price and the conversion price floor to $3.00 per share. On June 18, 2020, the Company made the fourth amendment to the Certificate of Designation of its Series A preferred stock, which lowered the fixed conversion price to $0.20 per share and the conversion price floor to $0.01 per share. Reverse Stock Split On April 14, 2020, the Company filed a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of the state of Nevada to effect a 1-for-300 reverse stock split with respect to the outstanding shares of the Company’s common stock. The Certificate of Amendment became effective on April 14, 2020 with the state of Nevada, and on April 20, 2020, Financial Industry Regulatory Authority, Inc. (FINRA) made the announcement of the reverse stock split. The reverse stock split was previously approved by the board of directors and the majority of stockholders of the Company. The reverse stock split was deemed effective at the open of business on April 21, 2020. As a result of the reverse stock split, every three hundred (300) shares of outstanding common stock of the Company as of April 14, 2020 were converted into one (1) share of common stock. Fractional shares resulting from the reverse stock split will be rounded up to the next whole number. All common share, warrant, stock option, and per share information in the consolidated financial statements gives retroactive effect to the 1-for-300 reverse stock split. There was no change to the number of authorized shares of common stock or preferred stock of the Company as a result of the reverse stock split. The par value of the Company’s common stock was unchanged at $0.00001 per share post-split. Amendment Number 2 of the Share Purchase Agreement with WaveTech GmbH On April 14, 2020, the Company entered into Amendment Number 2 of the share purchase agreement with WaveTech GmbH. Amendment Number 2 replaced the conversion terms of the Series C preferred stock included with Amendment Number 1 with the following: Conversion For purposes hereof, a “Triggering Event” shall include any liability arising from a breach by WaveTech GmbH, a corporation organized under the laws of the Republic of Germany, of any of its representations or warranties contained in that certain Share Purchase Agreement (the “SPA”), by and between the Corporation and WaveTech GmbH. “Losses” shall have the meaning set forth in the SPA. Additionally, Amendment Number 2 adjusted the amount of common stock issued on the Series C Conversion Date as follows: If on the earlier of (a) the tenth (l0th) business day prior to the listing of the Company on a national securities exchange (“Uplisting”), or (b) December 15, 2020, the aggregate value of the shares of common stock issued upon conversion of the Series C (the “Conversion Shares”) is less than 95% of the aggregate value of the Conversion Shares on the Series C Conversion Date (such difference in value, the “First Value Differential”), then the Company shall make a pro-rata issuance of additional shares of common stock to each holder in an aggregate amount equal to the First Value Differential (such additional shares, the “First True-Up Shares”). In the event (i) an Uplisting does not occur until sometime in 2021, and (ii) on such date in 2021 as the Board may determine, but in no event later than the tenth (10th) business day prior to the Uplisting (the “Second True-Up Date”), the aggregate value of the Conversion Shares as of the Second True-Up Date is less than 95% of the aggregate value of the Conversion Shares as of December 15, 2020 (such difference in value, the “Second Value Differential”), the Company shall, at the Board’s discretion, make a pro-rata issuance of additional shares of common stock to each holder in an aggregate amount equal to the Second Value Differential (such additional shares, the “Second True-Up Shares”). To the extent any shares of Series C are issued after the Series C Conversion Date, then the holder(s) of such shares shall receive the same number of Conversion Shares such holder(s) would have received had they held the Series C on the Series C Conversion Date. Issuance of Shares Pursuant to GS Capital Partners, LLC Convertible Debentures On April 30, 2020, the Company issued 302,121 shares of common stock to GS Capital Partners, LLC upon the conversion of $100,000 of principal and $5,742 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. Repayment of CCAG Investments, LLC Convertible Promissory Note On May 6, 2020, the Company repaid 120% of the principal balance owed to CCAG Investments, LLC. The total payment was $218,534, which included accrued interest of $8,534. Repayment of FJ Vulis and Associates, LLC Convertible Promissory Note On May 6, 2020, the Company repaid 120% of the principal balance owed to FJ Vulis and Associates, LLC. The total payment was $218,247, which included accrued interest of $8,247. Payments to RDM Capital Funding During the period of April 1, 2020 through May 8, 2020, the Company repaid the balance in full. Total cash payments during this period were $116,643, with a discount of $62,652 as a result of the Company paying the note off in under eight months from issuance. Issuance of Shares Pursuant to SCS, LLC Convertible Debentures On June 19, 2020, the Company issued 23,555 shares of common stock to SCS, LLC upon the conversion of $4,000 of principal and $240 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. Update on WaveTech GmbH transaction Between the period of April 1, 2020 through June 25, 2020, the Company obtained additional executed assignment agreements from shareholders holding an aggregate of 30% of the issued and outstanding shares of WaveTech GmbH. As a result, as of the date of this report, the Company has obtained executed assignment agreements from shareholders holding an aggregate of 90% of the issued and outstanding shares of WaveTech GmbH. Both parties have mutually agreed that the Series C preferred stock shares will be issued subsequent to June 30, 2020, likely during the third quarter of 2020. Once the Series C preferred stock shares are issued, the transaction will be considered closed for accounting purposes. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Condensed Financial Statements | Condensed Financial Statements The accompanying unaudited interim consolidated financial statements of the Company should be read in conjunction with the consolidated financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Form 10-K for the year ended December 31, 2019. In the opinion of management, the accompanying financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year. |
Basis of Presentation/Principles of Consolidation | Basis of Presentation/Principles of Consolidation These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. These consolidated financial statements include the accounts of the Company and its subsidiaries, the AWS Entities, the ADEX Entities, and TNS (from the date of acquisition, January 4, 2019). All of the subsidiaries are wholly-owned. All inter-company balances and transactions have been eliminated. |
Reverse Stock Split | Reverse Stock Split On April 14, 2020, the Company filed a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of the state of Nevada to effect a 1-for-300 reverse stock split with respect to the outstanding shares of the Company’s common stock. The Certificate of Amendment became effective on April 14, 2020 with the state of Nevada, and on April 20, 2020, Financial Industry Regulatory Authority, Inc. (FINRA) made the announcement of the reverse stock split. The reverse stock split was previously approved by the board of directors and the majority of stockholders of the Company. The reverse stock split was deemed effective at the open of business on April 21, 2020. As a result of the reverse stock split, every three hundred (300) shares of outstanding common stock of the Company as of April 14, 2020 were converted into one (1) share of common stock. Fractional shares resulting from the reverse stock split will be rounded up to the next whole number. All common share, warrant, stock option, and per share information in the consolidated financial statements gives retroactive effect to the 1-for-300 reverse stock split. There was no change to the number of authorized shares of common stock or preferred stock of the Company as a result of the reverse stock split. The par value of the Company’s common stock was unchanged at $0.00001 per share post-split. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for doubtful accounts, the estimated useful lives and recoverability of long-lived assets, equity component of convertible debt, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company records unbilled receivables for services performed but not billed. Management reviews a customer’s credit history before extending credit. The Company maintains an allowance for doubtful accounts for estimated losses. Estimates of uncollectible amounts are reviewed each period, and changes are recorded in the period in which they become known. Management analyzes the collectability of accounts receivable each period. This review considers the aging of account balances, historical bad debt experience, and changes in customer creditworthiness, current economic trends, customer payment activity and other relevant factors. Should any of these factors change, the estimate made by management may also change. The allowance for doubtful accounts at March 31, 2020 and December 31, 2019 was $470,303 and $504,785, respectively. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. The Company depreciates the cost of property and equipment over their estimated useful lives at the following annual rates: Automotive 3-5 years straight-line basis Computer equipment and software 3-7 years straight-line basis Leasehold improvements 5 years straight-line basis Office equipment and furniture 5 years straight-line basis Research equipment 5 years straight-line basis |
Goodwill | Goodwill Goodwill was generated through the acquisition of AWS, ADEX and TNS as the total consideration paid exceeded the fair value of the net assets acquired. The Company tests its goodwill for impairment at least annually on December 31st and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in the Company’s expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and the Company’s consolidated financial results. The Company tests goodwill by estimating fair value using a Discounted Cash Flow (“DCF”) model. The key assumptions used in the DCF model to determine the highest and best use of estimated future cash flows include revenue growth rates and profit margins based on internal forecasts, terminal value and an estimate of a market participant’s weighted-average cost of capital used to discount future cash flows to their present value. There were no impairment charges during the three months ended March 31, 2020 and 2019. |
Intangible Assets | Intangible Assets At March 31, 2020 and December 31, 2019, definite-lived intangible assets primarily consisted of tradenames and customer relationships which are being amortized over their estimated useful lives ranging from 5-35 years. The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives. For long-lived assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. There were no impairment charges during the three months ended March 31, 2020 and 2019. |
Long-lived Assets | Long-lived Assets In accordance with ASC 360, “Property, Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. There were no impairment charges recorded during the three months ended March 31, 2020 and 2019. |
Foreign Currency Translation | Foreign Currency Translation Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. The resulting foreign exchange gains and losses are recognized in income. The Company’s integrated foreign subsidiaries are financially or operationally dependent on the Company. The Company uses the temporal method to translate the accounts of its integrated operations into U.S. dollars. Monetary assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at average rates for the period, except for amortization, which is translated on the same basis as the related asset. The resulting foreign exchange gains or losses are recognized in income. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “ Accounting for Income Taxes The Company conducts business, and files federal and state income, franchise or net worth, tax returns in Canada, the United States, in various states within the United States and the Commonwealth of Puerto Rico. The Company determines it’s filing obligations in a jurisdiction in accordance with existing statutory and case law. The Company may be subject to a reassessment of federal and provincial income taxes by Canadian tax authorities for a period of three years from the date of the original notice of assessment in respect of any particular taxation year. For Canadian and U.S. income tax returns, the open taxation years range from 2010 to 2019. In certain circumstances, the U.S. federal statute of limitations can reach beyond the standard three year period. U.S. state statutes of limitations for income tax assessment vary from state to state. Tax authorities of Canada and U.S. have not audited any of the Company’s, or its subsidiaries’, income tax returns for the open taxation years noted above. Significant management judgment is required in determining the provision for income taxes, and in particular, any valuation allowance recorded against the Company’s deferred tax assets. Deferred tax assets are regularly reviewed for recoverability. The Company currently has significant deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences, which should reduce taxable income in future periods. The realization of these assets is dependent on generating future taxable income. The Company follows the guidance set forth within ASC Topic 740, “ Income Taxes The Company received a tax notice from the Puerto Rican government requesting payment of taxes related to 2014. The amount due as of March 31, 2020 and December 31, 2019 was $156,711 plus penalties and interest of $126,700 for a total obligation due of $283,411. This tax assessment was included in accrued expenses at March 31, 2020 and December 31, 2019. |
Revenue Recognition | Revenue Recognition Adoption of New Accounting Guidance on Revenue Recognition The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied. Contract Types The Company’s contracts fall under three main types: 1) unit-price, 2) fixed-price, and 3) time-and-materials. Unit-price contracts relate to services being performed and paid on a unit basis, such as per mile of construction completed. Fixed-price contracts are based on purchase order line items that are billed on individual invoices as the project progresses and milestones are reached. Time-and-materials contracts include employees working permanently at customer locations and materials costs incurred by those employees. A significant portion of the Company’s revenues come from customers with whom the Company has a master service agreement (“MSA”). These MSA’s generally contain customer specific service requirements. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company’s different revenue service types the performance obligation is satisfied at different times. For professional services revenue, the performance obligation is met when the work is performed. In certain cases this may be each day, or each week depending on the customer. For construction services, the performance obligation is met when the work is completed and the customer has approved the work. Contract assets include unbilled amounts for costs of services incurred on contracts with open performance obligations. These amounts are included in contract assets on the consolidated balance sheets. Contract liabilities include costs incurred and are included in contract liabilities on the consolidated balance sheets. Revenue Service Types The following is a description of the Company’s revenue service types, which include professional services and construction: ● Professional services are services provided to the clients where the Company delivers distinct contractual deliverables and/or services. Deliverables may include but are not be limited to: engineering drawings, designs, reports and specification. Services may include, but are not be limited to: consulting or professional staffing to support our client’s objectives. Consulting or professional staffing services may be provided remotely or on client premises and under their direction and supervision. ● Construction Services are services provided to the client where the Company may self-perform or subcontract services that require the physical construction of infrastructure or installation of equipment and materials. Disaggregation of Revenues The Company disaggregates its revenue from contracts with customers by service type, contract type, contract duration, and timing of transfer of goods or services. See the below tables: Revenue by service type Three months ended March 31, 2020 Three months ended March 31, 2019 Professional Services $ 5,367,311 $ 5,935,226 Construction 1,763,169 5,400,506 Total $ 7,130,480 $ 11,335,732 Revenue by contract duration Three months ended March 31, 2020 Three months ended March 31, 2019 Short-term $ 28,305 $ 65,430 Long-term 7,102,175 11,270,302 Total $ 7,130,480 $ 11,335,732 Revenue by contract type Three months ended March 31, 2020 Three months ended March 31, 2019 Unit-price $ 160,827 $ 3,238,658 Fixed-price 1,602,342 2,161,848 Time-and-materials 5,367,311 5,935,226 Total $ 7,130,480 $ 11,335,732 The Company also disaggregates its revenue by operating segment and geographic location (refer to Note 16, Segment Disclosures, for additional information). Accounts Receivable Accounts receivable include amounts from work completed in which the Company has billed. The amounts due are stated at their net estimated realizable value. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable. Contract Assets and Liabilities Contract assets include costs and services incurred on contracts with open performance obligations. These amounts are included in contract assets on the consolidated balance sheets. At March 31, 2020 and December 31, 2019, contract assets totaled $237,862 and $461,681, respectively. Contract liabilities include costs incurred and are included in contract liabilities on the consolidated balance sheets. At March 31, 2020 and December 31, 2019, contract liabilities totaled $705,396 and $704,544, respectively. |
Cost of Revenues | Cost of Revenues Cost of revenues includes all direct costs of providing services under the Company’s contracts, including costs for direct labor provided by employees, services by independent subcontractors, operation of capital equipment (excluding depreciation and amortization), direct materials, insurance claims and other direct costs. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. |
Stock-based Compensation | Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, “ Compensation – Stock Compensation The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASU 2018-07. The Company uses the Black-Scholes option pricing model to calculate the fair value of stock-based awards. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations over the requisite service period. |
Loss per Share | Loss per Share The Company computes loss per share in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted loss per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing the loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of March 31, 2020 and December 31, 2019, respectively, the Company had 990,158 and 286,736 common stock equivalents outstanding. |
Leases | Leases The Company adopted FASB Accounting Standards Codification, Topic 842, Leases (“ASC 842”) electing the practical expedient that allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. For the comparative periods prior to adoption, the Company presented the disclosures which were required under ASC 840. The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months as of January 1, 2019. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, unamortized lease incentives provided by lessors, and restructuring liabilities, Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or result of operations |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivables. The Company maintains its cash balances with high-credit-quality financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits may be withdrawn upon demand and therefore bear minimal risk. The Company provides credit to customers on an uncollateralized basis after evaluating client creditworthiness. For the three months ended March 31, 2020, three customers accounted for 31%, 13% and 13%, respectively, of consolidated revenues for the period. In addition, amounts due from these customers represented 42%, 3% and 10%, respectively, of trade accounts receivable as of March 31, 2020. For the three months ended March 31, 2019, four customers accounted for 30%, 18%, 10% and 10%, respectively, of consolidated revenues for the period. In addition, amounts due from these customers represented 30%, 20%, 7% and 5%, respectively, of trade accounts receivable as of March 31, 2019. The Company’s customers are primarily located within the domestic United States of America and Puerto Rico. Revenues generated within the domestic United States of America accounted for approximately 98% and 97% of consolidated revenues for the three months ended March 31, 2020 and 2019, respectively. Revenues generated from customers in Puerto Rico accounted for approximately 2% and 3% of consolidated revenues for the three months ended March 31, 2020 and 2019, respectively. |
Fair Value Measurements | Fair Value Measurements The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by US generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is defined as follows: Level 1 – quoted prices for identical instruments in active markets; Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Financial instruments consist principally of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, loans payable and convertible debentures. Derivative liabilities are determined based on “Level 3” inputs, which are significant and unobservable and have the lowest priority. There were no transfers into or out of “Level 3” during the three months ended March 31, 2020 or the year ended December 31, 2019. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. The Company’s financial assets and liabilities carried at fair value measured on a recurring basis as of March 31, 2020 and December 31, 2019 consisted of the following: Total fair value at March 31, 2020 Quoted prices in active markets (Level 1) Quoted prices in active markets (Level 2) Quoted prices in active markets (Level 3) Derivative liability (1) $ 2,063,063 $ - $ - $ 2,063,063 Total fair value at December 31, 2019 Quoted prices in active markets (Level 1) Quoted prices in active markets (Level 2) Quoted prices in active markets (Level 3) Derivative liability (1) $ 992,733 $ - $ - $ 992,733 (1) The Company has estimated the fair value of these derivatives using the Monte-Carlo model and/or a Binomial Model. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Refer to Note 10, Derivative Liabilities, for additional information. |
Derivative Liabilities | Derivative Liabilities The Company accounts for derivative instruments in accordance with ASC Topic 815, “ Derivatives and Hedging |
Sequencing Policy | Sequencing Policy Under ASC 815-40-35, the Company has adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuance of securities to the Company’s employees or directors are not subject to the sequencing policy. |
Reclassifications | Reclassifications Certain balances in previously issued consolidated financial statements have been reclassified to be consistent with the current period presentation. The reclassification had no impact on total financial position, net income, or stockholders’ equity. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment estimated useful lives | Automotive 3-5 years straight-line basis Computer equipment and software 3-7 years straight-line basis Leasehold improvements 5 years straight-line basis Office equipment and furniture 5 years straight-line basis Research equipment 5 years straight-line basis |
Schedule of disaggregates its revenue from contracts with customers by service type | Revenue by service type Three months ended March 31, 2020 Three months ended March 31, 2019 Professional Services $ 5,367,311 $ 5,935,226 Construction 1,763,169 5,400,506 Total $ 7,130,480 $ 11,335,732 Revenue by contract duration Three months ended March 31, 2020 Three months ended March 31, 2019 Short-term $ 28,305 $ 65,430 Long-term 7,102,175 11,270,302 Total $ 7,130,480 $ 11,335,732 Revenue by contract type Three months ended March 31, 2020 Three months ended March 31, 2019 Unit-price $ 160,827 $ 3,238,658 Fixed-price 1,602,342 2,161,848 Time-and-materials 5,367,311 5,935,226 Total $ 7,130,480 $ 11,335,732 |
Schedule of financial assets and liabilities fair value measured on a recurring basis | Total fair value at March 31, 2020 Quoted prices in active markets (Level 1) Quoted prices in active markets (Level 2) Quoted prices in active markets (Level 3) Derivative liability (1) $ 2,063,063 $ - $ - $ 2,063,063 Total fair value at December 31, 2019 Quoted prices in active markets (Level 1) Quoted prices in active markets (Level 2) Quoted prices in active markets (Level 3) Derivative liability (1) $ 992,733 $ - $ - $ 992,733 (1) The Company has estimated the fair value of these derivatives using the Monte-Carlo model and/or a Binomial Model. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | March 31, December 31, 2020 2019 Computers and office equipment $ 349,271 $ 349,271 Equipment 382,140 382,140 Research equipment 143,129 143,129 Software 227,563 227,563 Vehicles 94,356 94,356 Vehicles under capital lease - - Total 1,196,459 1,196,459 Less: impairment (44,419 ) (44,419 ) Less: accumulated depreciation (1,069,416 ) (1,058,973 ) Equipment, net $ 82,624 $ 93,067 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Cost Accumulated Amortization Impairment Net carrying value at March 31, 2020 Net carrying value at December 31, 2019 Customer relationship and lists $ 2,930,829 $ 504,181 $ - $ 2,426,648 $ 2,490,024 Trade names 1,400,121 235,580 - 1,164,541 1,187,895 Total intangible assets $ 4,330,950 $ 739,761 $ - $ 3,591,189 $ 3,677,919 |
Schedule of estimated future amortization expense | Year ending December 31, 2020 $ 260,191 2021 346,921 2022 346,921 2023 346,921 2024 346,921 Thereafter 1,943,314 Total $ 3,591,189 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | March 31, December 31, 2020 2019 Promissory note issued to Roger Ponder, 10% interest, unsecured, due on demand $ 18,858 $ 18,858 Promissory note issued to Keith Hayter, 10% interest, unsecured, due on demand 130,000 130,000 Promissory note issued to Keith Hayter, 10% and 8% interest, unsecured, matures April 13, 2020 85,000 85,000 Promissory note issued to Keith Hayter, 8% interest, unsecured, due on demand 80,000 80,000 Promissory note issued to Keith Hayter, 10% interest, unsecured, matures August 11, 2020 170,000 170,000 Promissory note issued to InterCloud Systems, Inc., non-interest bearing, unsecured and due on demand 217,400 217,400 Loan with WaveTech GmbH, 8% interest, due on demand - * 3,000,000 Total $ 701,258 $ 3,701,258 * As of March 31, 2020, in connection with amounts owed to the Company from WaveTech GmbH, the loan with WaveTech GmbH is now being netted against amounts due from WaveTech GmbH (refer to Note 3, Due From Related Party, for additional detail). |
Loans Payable (Tables)
Loans Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Loans Payable [Abstract] | |
Schedule of loans payable | March 31, December 31, 2020 2019 Promissory note issued to J. Thacker, non-interest bearing, unsecured and due on demand $ 41,361 $ 41,361 Promissory note issued to S. Kahn, non-interest bearing, unsecured and due on demand 7,760 7,760 Promissory note issued to 0738856 BC ltd non-interest bearing, unsecured and due on demand 2,636 2,636 Promissory note issued to 0738856 BC Ltd, non-interest bearing, unsecured and due on demand 15,000 15,000 Promissory note issued to Bluekey Energy, non-interest bearing, unsecured and due on demand 7,500 7,500 Subscription amount due to T. Warkentin non-interest bearing, unsecured and due on demand 50,000 50,000 Promissory note issued to Old Main Capital LLC, 10% interest, unsecured and due on demand 12,000 12,000 Promissory note issued to Pawn Funding, non-interest bearing, matures July 24, 2020, net of debt discount of $11,260 and $31,365 60,459 94,928 Promissory note issued to RDM Capital Funding, non-interest bearing, matures July 24, 2020, net of debt discount of $28,149 and $79,087 151,146 237,319 Loan with Heritage Bank of Commerce, interest rate of prime plus 2%, secured by all assets of the Company, matures October 20, 2020, net of debt discount of $149,180 - 2,973,458 Promissory note issued to C6 Capital, non-interest bearing, matures April 15, 2020, net of debt discount of $20,272 - 136,424 Total $ 347,862 $ 3,578,386 |
Convertible Debentures (Tables)
Convertible Debentures (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of convertible promissory note | March 31, December 31, 2020 2019 Convertible promissory note, Barn 11, 18% interest, unsecured, matured June 1, 2019 $ 594,362 $ 594,362 Convertible promissory note, Dominion Capital, 12% interest, unsecured, matures October 17, 2020, net of debt discount of $50,443 and 105,752 1,512,458 1,461,265 Convertible promissory note, Michael Roeske, 24% interest, unsecured, due on demand, net of debt discount of $0 and $3,512 145,000 112,488 Convertible promissory note, Joel Raven, 24% interest, unsecured, due on demand, net of debt discount of $0 and $8,658 455,000 355,342 Convertible promissory note, GS Capital Partners, LLC, 8% interest, secured. matures August 2, 2020, net of debt discount of $13,891 and $24,819 86,109 98,181 Convertible promissory note, SCS, LLC, 24% interest, unsecured, matured March 30, 2020, due on demand, net of debt discount of $0 and $13,005 63,788 38,025 Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures September 17, 2020, net of debt discount of $75,861 and $113,674 72,139 34,326 Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures January 22, 2021, net of debt discount of $40,750 and $53,051 27,750 15,449 Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures February 26, 2021, net of debt discount of $35,417 and $45,125 22,583 12,875 Convertible promissory note, GS Capital Partners, LLC, 8% interest, secured. matures October 24 2020, net of debt discount of $16,778 and $23,986 106,222 99,014 Convertible promissory note, Crown Bridge Partners, LLC, 10% interest, unsecured, matures November 21, 2020, net of debt discount of $46,898 and $58,648 28,102 16,352 Convertible promissory note, CCAG Investments, LLC, 8% interest, secured, matures June 30, 2020, net of debt discount of $110,654 64,346 - Convertible promissory note, FJ Vulis and Associates, LLC, 8% interest, secured, matures June 30, 2020, net of debt discount of $110,654 64,346 - Total 3,242,205 2,837,679 Less: Long-term portion of convertible debentures, net of debt discount - (28,324 ) Convertible debentures, current portion, net of debt discount $ 3,242,205 $ 2,809,355 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of changes in the fair value of the Company's Level 3 financial liabilities | March 31, December 31, 2020 2019 Balance at the beginning of the period $ 992,733 $ 3,166,886 Change in fair value of embedded conversion option 813,630 (1,843,935 ) Fair value of debt derivatives at issuance 84,000 - Fair value of warrant derivatives at issuance 128,000 - Fair value of option derivatives at issuance 44,700 - Conversion of derivative liability - (1,281,888 ) Original discount limited to proceeds of notes 376,500 Repayment of convertible note - (164,468 ) Derivative issued as part of acquisition - 189,000 Fair value of derivative liabilities in excess of notes proceeds received - 116,638 Addition to derivative due to default penalty - 466,000 Impact of note extinguishment - (32,000 ) Balance at the end of the period $ 2,063,063 $ 992,733 |
Schedule of assumptions used in the calculations | Expected volatility Risk-free interest rate Expected dividend yield Expected life At December 31, 2019 230 - 304% 1.55 - 1.75% 0 % 0.25 - 1.16 At March 31, 2020 193 - 361% 0.04 - 1.75% 0 % 0.08 - 2.85 |
Share Purchase Warrants and S_2
Share Purchase Warrants and Stock Options (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share Purchase Warrants [Abstract] | |
Schedule of share purchase warrants | Number of warrants Weighted average exercise price Balance at December 31, 2019 14,075 $ 331.46 Issued 64,134 253.57 Expired - - Balance at March 31, 2020 78,209 $ 267.59 |
Schedule of stock options outstanding | Number of warrants Exercise price Issuance Date Expiry date 459 1,530.00 28-04-2017 28-04-2020 834 300.00 27-06-2017 27-06-2020 52,506 * 360.00 14-02-2018 13-02-2021 417 480.00 21-02-2018 21-02-2021 1,667 300.00 17-05-2018 17-05-2020 380 324.00 10-10-2018 10-10-2021 2,500 30.00 21-11-2019 21-11-2022 9,723 9.00 07-02-2020 07-02-2023 9,723 9.00 07-02-2020 07-02-2023 78,209 * This warrant is convertible into 4% of the number of common shares of the Company outstanding. At March 31, 2020, it is 4% of the 1,312,634 shares outstanding as of that date. |
Schedule of stock options outstanding | Number of stock options Weighted average exercise price Balance at December 31, 2019 5,000 $ 9.00 Issued - - Expired - - Balance at March 31, 2020 5,000 $ 9.00 |
Schedule of stock options outstanding | Number of stock options Exercise price Issuance Date Expiry date 5,000 9.00 11/25/2019 11/25/2021 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of operating leases related to assets and liabilities | March 31, December 31, 2020 2019 Operating lease assets $ 136,211 $ 168,384 Operating lease liabilities: Current operating lease liabilities 141,688 173,351 Total operating lease liabilities $ 141,688 $ 173,351 |
Schedule of weighted-average discount rate | Year ending December 31, 2020 $ 70,203 2021 95,914 2022 86,681 2023 21,330 Total lease payments 274,128 Less: imputed interest (132,440 ) Total $ 141,688 |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of information by operating segment | Three Months Ended March 31, 2020 Spectrum Global AWS/ADEX/ TNS Total Net sales $ - $ 7,130,480 $ 7,130,480 Operating loss (745,562 ) (915,990 ) (1,661,552 ) Interest expense 341,226 74,921 416,147 Depreciation and amortization - 97,173 97,173 Total assets as of March 31, 2020 5,194,959 11,113,716 16,308,675 Three Months Ended March 31, 2019 Spectrum Global AWS/ADEX Total Net sales $ - $ 11,335,732 $ 11,335,732 Operating (loss) income (954,965 ) 969,666 14,701 Interest expense 399,555 71,857 471,412 Depreciation and amortization - 93,952 93,952 Total assets as of December 31, 2019 11,783 12,157,035 12,168,818 |
Schedule of geographic information | Revenues For The Three Months Ended March 31, 2020 Long-lived Assets as of March 31, 2020 Puerto Rico $ 170,512 $ 9,268 United States 6,959,968 5,802,767 Consolidated total 7,130,480 5,812,035 Revenues For The Three Months Ended March 31, 2019 Long-lived Assets as of December 31, 2019 Puerto Rico $ 310,478 $ 9,698 United States 11,025,254 5,861,240 Consolidated total 11,335,732 5,870,938 |
Organization and Going Concern
Organization and Going Concern (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Feb. 14, 2018 | Apr. 25, 2017 |
Organization and Going Concern (Details) [Line Items] | ||||
Accumulated deficit | $ (34,144,137) | $ (30,492,435) | ||
Working capital deficit | $ 4,534,404 | |||
Inter Cloud [Member] | ||||
Organization and Going Concern (Details) [Line Items] | ||||
Business acquisition, percentage | 19.90% | |||
Purchase Agreement of Financial Assets [Member] | Inter Cloud [Member] | ||||
Organization and Going Concern (Details) [Line Items] | ||||
Business acquisition, percentage | 80.10% |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | Apr. 14, 2020 | Mar. 31, 2020USD ($)shares | Mar. 31, 2019 | Dec. 31, 2019USD ($)shares | |
Significant Accounting Policies (Details) [Line Items] | |||||
Reverse stock split, description | All common share, warrant, stock option, and per share information in the consolidated financial statements gives retroactive effect to the 1-for-300 reverse stock split. There was no change to the number of authorized shares of common stock or preferred stock of the Company as a result of the reverse stock split. The par value of the Company’s common stock was unchanged at $0.00001 per share post-split. | ||||
Common stock converted, description | The reverse stock split was deemed effective at the open of business on April 21, 2020. As a result of the reverse stock split, every three hundred (300) shares of outstanding common stock of the Company as of April 14, 2020 were converted into one (1) share of common stock. Fractional shares resulting from the reverse stock split will be rounded up to the next whole number. | ||||
Allowance for doubtful accounts (in Dollars) | $ 470,303 | $ 504,785 | |||
Contract assets (in Dollars) | 237,862 | 461,681 | |||
Contract liabilities (in Dollars) | $ 705,396 | $ 704,544 | |||
Dilutive potential shares outstanding (in Shares) | shares | 286,736 | 990,158 | |||
Number of customers | 3 | 4 | |||
Derivative liability (in Dollars) | [1] | $ 2,063,063 | $ 992,733 | ||
Maximum [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Definite-lived intangible assets useful lives | 2 years | 2 years | |||
Minimum [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Definite-lived intangible assets useful lives | 5 years | 2 years | |||
Subsequent Event [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Reverse stock split, description | 2. | ||||
Revenue Benchmark [Member] | Customer One [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 31.00% | 30.00% | |||
Revenue Benchmark [Member] | Customer Two [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 13.00% | 18.00% | |||
Revenue Benchmark [Member] | Customer Three [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 13.00% | 10.00% | |||
Revenue Benchmark [Member] | Customer Four [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 10.00% | ||||
Accounts Receivable [Member] | Customer One [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 42.00% | 30.00% | |||
Accounts Receivable [Member] | Customer Two [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 3.00% | 20.00% | |||
Accounts Receivable [Member] | Customer Three [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 10.00% | 7.00% | |||
Accounts Receivable [Member] | Customer Four [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 5.00% | ||||
UNITED STATES | Revenue Benchmark [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 98.00% | 97.00% | |||
PUERTO RICO | Revenue Benchmark [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 2.00% | 3.00% | |||
[1] | The Company has estimated the fair value of these derivatives using the Monte-Carlo model and/or a Binomial Model. |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives | 12 Months Ended |
Dec. 31, 2019 | |
Leasehold improvements [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 5 years |
Office equipment and furniture [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 5 years |
Research equipment [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 5 years |
Minimum [Member] | Automotive [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 3 years |
Minimum [Member] | Computer equipment and software [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 3 years |
Maximum [Member] | Automotive [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 5 years |
Maximum [Member] | Computer equipment and software [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 7 years |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Schedule of disaggregates its revenue from contracts with customers by service type - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Professional Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 5,367,311 | $ 5,935,226 |
Constrction [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,763,169 | 5,400,506 |
Revenue by service type [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7,130,480 | 11,335,732 |
Short-term [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 28,305 | 65,430 |
Long-term [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7,102,175 | 11,270,302 |
Revenue by contract duration [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7,130,480 | 11,335,732 |
Unit Price [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 160,827 | 3,238,658 |
Fixed-price [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,602,342 | 2,161,848 |
Time-and-materials [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5,367,311 | 5,935,226 |
Revenue by contract type [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 7,130,480 | $ 11,335,732 |
Significant Accounting Polici_6
Significant Accounting Policies (Details) - Schedule of financial assets and liabilities fair value measured on a recurring basis - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | |
Significant Accounting Policies (Details) - Schedule of financial assets and liabilities fair value measured on a recurring basis [Line Items] | |||
Derivative liability | [1] | $ 2,063,063 | $ 992,733 |
Quoted prices in active markets (Level 1) [Member] | |||
Significant Accounting Policies (Details) - Schedule of financial assets and liabilities fair value measured on a recurring basis [Line Items] | |||
Derivative liability | [1] | ||
Quoted prices in active markets (Level 2) [Member] | |||
Significant Accounting Policies (Details) - Schedule of financial assets and liabilities fair value measured on a recurring basis [Line Items] | |||
Derivative liability | [1] | ||
Quoted prices in active markets (Level 3) [Member] | |||
Significant Accounting Policies (Details) - Schedule of financial assets and liabilities fair value measured on a recurring basis [Line Items] | |||
Derivative liability | [1] | $ 2,063,063 | $ 992,733 |
[1] | The Company has estimated the fair value of these derivatives using the Monte-Carlo model and/or a Binomial Model. |
Due From Related Party (Details
Due From Related Party (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Feb. 04, 2019 | |
Due From Related Party (Details) [Line Items] | |||
Due from related parties | $ 5,207,585 | ||
Interest rate | 8.00% | ||
Conversion of shares (in Shares) | 1,082,731 | ||
Conversion price (in Dollars per share) | $ 7.80 | ||
ConversionOfStockAmountIssued1 | $ 8,507,557 | ||
Balance loan | 299,972 | $ 1,325,895 | |
WaveTech GmbH [Member] | |||
Due From Related Party (Details) [Line Items] | |||
Cash | 7,531,309 | ||
Balance loan | 3,000,000 | ||
Outstanding loan | $ 3,299,972 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 10,443 | $ 7,018 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 1,196,459 | $ 1,196,459 |
Less: impairment | (44,419) | (44,419) |
Less: accumulated depreciation | (1,069,416) | (1,058,973) |
Equipment, net | 82,624 | 93,067 |
Computers and office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 349,271 | 349,271 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 382,140 | 382,140 |
Research equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 143,129 | 143,129 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 227,563 | 227,563 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 94,356 | 94,356 |
Vehicles under capital lease [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 86,730 | $ 86,934 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of intangible assets - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 4,330,950 | |
Accumulated Amortization | 739,761 | |
Impairment | ||
Net carrying value | 3,591,189 | $ 3,677,919 |
Customer relationship and lists [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 2,930,829 | |
Accumulated Amortization | 504,181 | |
Impairment | ||
Net carrying value | 2,426,648 | 2,490,024 |
Trade names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,400,121 | |
Accumulated Amortization | 235,580 | |
Impairment | ||
Net carrying value | $ 1,164,541 | $ 1,187,895 |
Intangible Assets (Details) -_2
Intangible Assets (Details) - Schedule of estimated future amortization expense - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of estimated future amortization expense [Abstract] | ||
2020 | $ 260,191 | |
2021 | 346,921 | |
2022 | 346,921 | |
2023 | 346,921 | |
2024 | 346,921 | |
Thereafter | 1,943,314 | |
Total | $ 3,591,189 | $ 3,677,919 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Nov. 14, 2019 | Nov. 14, 2019 | Aug. 12, 2019 | Aug. 02, 2019 | Jul. 15, 2019 | May 06, 2019 | Apr. 13, 2019 | Mar. 15, 2019 | Dec. 03, 2018 | Oct. 10, 2018 | Jun. 07, 2018 | Apr. 13, 2018 | Dec. 15, 2017 | Jul. 15, 2017 | Nov. 30, 2019 | Aug. 20, 2019 | Jan. 24, 2019 | Sep. 26, 2018 | Aug. 21, 2018 | Jul. 03, 2018 | Feb. 27, 2018 | Feb. 21, 2018 | Feb. 16, 2018 | Feb. 14, 2018 | Nov. 30, 2017 | Apr. 27, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 17, 2019 | Aug. 16, 2019 | Aug. 27, 2017 |
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Due to related parties | $ 50,577 | ||||||||||||||||||||||||||||||||
Acquiring percentage | 60.00% | ||||||||||||||||||||||||||||||||
Description of promissory note | On May 6, 2019, the remaining principal balance of $1,452,299 was converted into shares of the Company’s common stock through an automatic forced conversion. | In addition, the Company issued a warrant (the “Warrant”) to the Lender to purchase an amount of shares of the Company’s common stock equal to $150,000 divided by the Warrant Price (as defined in the Warrant) at a price per share equal to 125% of the prior day’s closing price. | On February 21, 2018, the Company issued a convertible note with a principal amount of $500,000 and a warrant with a term of three years to purchase up to 417 shares of common stock of the Company at an exercise price of $480.00 per share to Barn 11. The exercise price of the warrant was to reduce to 85% of the closing price of the Company’s common stock if the closing price of the Company’s common stock was less than $480.00 on July 31, 2018. The note was due on January 15, 2019, and in February 2019, the maturity date was extended to June 1, 2019, and bears interest at 6% per annum. The note is convertible into common shares of the Company at a conversion price equal to the lower of 80% of the lowest volume-weighted average price during the 5 trading days immediately preceding the date of conversion and $300.00 (the “Floor”), unless the note is in default, at which time the Floor terminates. The embedded conversion option and warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $571,079 and the warrant of $158,772 resulted in a discount to the note payable of $500,000 and an initial derivative expense of $229,851. On June 1, 2019, the Company was in default on the note. As a result of the default, a 15% premium was added to the balance owed, including all accrued interest. Subsequent to the default, the new principal balance of the note is $619,362, with interest now accruing at 18% per annum. Additionally, $466,000 was added to the derivative liability balance in connection with the default. During the year ended December 31, 2019, the Company paid $25,000 of principal. The Company owed $594,362 as of March 31, 2020. Convertible promissory note, Dominion Capital, 12% interest, unsecured, matures October 17, 2020 On April 17, 2019, Dominion Capital exchanged two notes into a new note (the “Exchange Note”) with a principal amount of $1,571,134. Interest accrues on the new note at 12% per annum. All principal and accrued interest under the Exchange Note is due on October 17, 2020 and is convertible into shares of the Company’s common stock. The conversion price in effect on the date such conversion is effected shall be equal to (i) initially, $30.00 or (ii) on or after the date of the closing of the next public or private offering of equity or equity-linked securities of the Company in which the Company receives gross proceeds in an amount greater than $100,000, one hundred and five percent (105%) of the price of the common stock issuable in the offering. While during the first six months that the Exchange Note is outstanding, only interest payments are due to the holder, beginning in October 2019, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under the Exchange Note. The Exchange Note includes customary events of default, including non-payment of the principal or accrued interest due on the Exchange Note. Upon an event of default, all obligations under the Exchange Note will become immediately due and payable. The Holder was granted a right to participate in future financing transactions of the Company while the Exchange Note remains outstanding. As a result of the beneficial conversion feature associated with the Dominion notes, $314,228 was added to additional paid-in capital during the year ended December 31, 2019. In connection with the exchange, the Company recorded a loss on settlement of debt of $904,469 on the consolidated statement of operations for the year ended December 31, 2019. The Company was to begin making principal payments in equal installments beginning on October 1, 2019. On October 22, 2019, the Company reached an agreement with Dominion Capital to postpone the principal payments. In exchange for the extension, the Company will pay to Dominion Capital an extension fee equal to 14% of the postponed payments. As a result of this agreement, the Company added $47,731 of principal to note during the year ended December 31, 2019 and the three months ended March 31, 2020. During the year ended December 31, 2019 and the three months ended March 31, 2020, the Company paid $51,848 of principal. The Company owed $1,562,901 as of March 31, 2020 and will record accretion equal to the debt discount of $50,443 over the remaining term of the note. Convertible promissory note issued in connection with the acquisition of TNS, Inc. On January 4, 2019, as part of the acquisition described in Note 3, Acquisition of TNS, Inc., the Company issued to InterCloud a convertible promissory note in the aggregate principal amount of $620,000 (the “Note”). The interest on the outstanding principal due under the Note accrued at a rate of 6% per annum. All principal and accrued interest under the Note was due January 30, 2020, and was convertible, at any time at InterCloud’s election, into shares of common stock of the Company at a conversion price equal to the greater of 75% of the lowest volume-weighted average price during the 10 trading days immediately preceding the date of conversion and $30.00. The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $189,000 resulted in a discount to the note payable of $144,000. On January 28, 2019, the holder of the convertible promissory note entered into agreement to sell and assign a total of $620,000 of the $620,000 outstanding principal to two third parties, with $186,000 and $434,000 of principal assigned to each party (refer to the “Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020” and “Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020” sections of this note for further detail). The Company approved and is bound by the assignment and sale agreement. Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020 On January 28, 2019, InterCloud assigned $186,000 of the note issued in connection with the acquisition of TNS to Michael Roeske. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Roeske converted $70,000 of principal of the note into shares of the Company’s common stock. The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $29,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $145,000 pursuant to this agreement. Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020 On January 28, 2019, InterCloud assigned $434,000 of the note issued in connection with the acquisition of TNS to Joel Raven. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Raven converted $70,000 of principal of the note into shares of the Company’s common stock The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $91,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $455,000 pursuant to this agreement. Convertible promissory note, GS Capital Partners, LLC, 8% interest, secured, matures August 2, 2020 On August 2, 2019, the Company entered into and closed on a Securities Purchase Agreement with GS Capital Partners, LLC, pursuant to which the Company issued to GS Capital Partners, LLC a senior secured convertible promissory note in the aggregate principal amount of $123,000 for an aggregate purchase price of $112,000. The interest on the outstanding principal due under the secured note accrued at a rate of 8% per annum. | ||||||||||||||||||||||||||||||
Proceeds from issuance of promissory notes | $ 85,000 | ||||||||||||||||||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||||||||||||||||||
Gain loss on settlement of debt | $ (190,902) | $ 164,467 | |||||||||||||||||||||||||||||||
Debt instrument, interest rate terms, description | the holder of the convertible promissory note entered into agreement to sell and assign a total of $75,000 of the outstanding principal to a third party. The Company approved and was bound by the assignment and sale agreement. As a result of the assignment, the assigned note bore interest at 5% and the conversion price for the $75,000 of notes assigned was equal to the lesser 75% of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion and $2,400.00. On December 3, 2018, the holder of the convertible promissory note entered into agreement to sell and assign a total of $50,000 of the outstanding principal to a third party. | ||||||||||||||||||||||||||||||||
ConversionOfStockAmountIssued1 | 8,507,557 | ||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 135,000 | ||||||||||||||||||||||||||||||||
Fair value of the warrants | 838,062 | ||||||||||||||||||||||||||||||||
Repaid loan amount | 164,468 | ||||||||||||||||||||||||||||||||
Loan received in cash | $ 3,000,000 | ||||||||||||||||||||||||||||||||
Additional loan received | $ 1,664,083 | ||||||||||||||||||||||||||||||||
Adex [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||||||||||||||||||
Outstanding principal amount | 217,400 | ||||||||||||||||||||||||||||||||
Purchase price | 500,000 | ||||||||||||||||||||||||||||||||
Repaid loan amount | $ 57,600 | ||||||||||||||||||||||||||||||||
WaveTech GmbH [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Acquiring percentage | 60.00% | ||||||||||||||||||||||||||||||||
Outstanding principal amount | $ 3,000,000 | ||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 2,000,000 | ||||||||||||||||||||||||||||||||
Loan received in cash | $ 1,325,895 | ||||||||||||||||||||||||||||||||
Acquiring outstanding shares (in Shares) | 0.60 | ||||||||||||||||||||||||||||||||
Roger Ponden [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Description of promissory note | Promissory note issued to Roger Ponder, 10% interest, unsecured, matured on November 30, 2018 and extended to November 30, 2019 | ||||||||||||||||||||||||||||||||
Keith Hayter [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Description of promissory note | Promissory note issued to Keith Hayter, 10% interest, unsecured, matured on November 30, 2018 and extended to November 30, 2019 | ||||||||||||||||||||||||||||||||
President [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Due date | Apr. 13, 2020 | ||||||||||||||||||||||||||||||||
Bearing interest rate, per annum | 10.00% | ||||||||||||||||||||||||||||||||
Keith Hayter 1 [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Description of promissory note | Promissory note issued to Keith Hayter, 8% interest, unsecured, matured October 1, 2019 | ||||||||||||||||||||||||||||||||
Keith Hayter 2 [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Description of promissory note | Promissory note issued to Keith Hayter, 10% interest, unsecured, matures August 11, 2020 | ||||||||||||||||||||||||||||||||
Inter Cloud [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Due to related parties | $ 50,577 | ||||||||||||||||||||||||||||||||
Chief Executive Officer [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Proceeds from issuance of promissory notes | $ 18,858 | ||||||||||||||||||||||||||||||||
Chief Executive Officer [Member] | Unsecured Debt [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Due date | Nov. 30, 2018 | ||||||||||||||||||||||||||||||||
Bearing interest rate, per annum | 10.00% | ||||||||||||||||||||||||||||||||
President [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Proceeds from issuance of promissory notes | $ 170,000 | $ 80,000 | |||||||||||||||||||||||||||||||
Bearing interest rate, per annum | 0.10% | ||||||||||||||||||||||||||||||||
President [Member] | Unsecured Debt [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Proceeds from issuance of promissory notes | $ 130,000 | ||||||||||||||||||||||||||||||||
President Two [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Bearing interest rate, per annum | 8.00% | ||||||||||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||||||||||
Debt Instrument, Maturity Date, Description | On August 20, 2019, the note was amended to a maturity date of October 1, 2019 and an interest rate of 10%. | ||||||||||||||||||||||||||||||||
President Two [Member] | Unsecured Debt [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||||||||||||||||||
President One [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Proceeds from issuance of promissory notes | $ 85,000 | ||||||||||||||||||||||||||||||||
Bearing interest rate, per annum | 8.00% | ||||||||||||||||||||||||||||||||
Keith Hayter [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Proceeds from issuance of promissory notes | $ 0.08 | ||||||||||||||||||||||||||||||||
Convertible Promissory Notes [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Due date | Apr. 27, 2018 | ||||||||||||||||||||||||||||||||
Bearing interest rate, per annum | 8.00% | ||||||||||||||||||||||||||||||||
Debt instrument, interest rate terms, description | As a result of the assignment, the conversion price for the total of $354,375 of notes assigned was equal to the lesser 70% of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion and $2,400.00. | ||||||||||||||||||||||||||||||||
Fair value of the conversion feature | $ 1,174,000 | $ 348,000 | |||||||||||||||||||||||||||||||
Notes payable | $ 943,299 | $ 348,000 | |||||||||||||||||||||||||||||||
Outstanding principal amount | $ 100,000 | $ 39,375 | $ 105,000 | $ 100,000 | $ 105,000 | $ 105,000 | |||||||||||||||||||||||||||
ConversionOfStockAmountIssued1 | $ 354,375 | ||||||||||||||||||||||||||||||||
Loan received in cash | $ 3,000,000 | ||||||||||||||||||||||||||||||||
Convertible Promissory Notes [Member] | Unsecured Debt [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Debt instrument, interest rate terms, description | The interest on the outstanding principal due under the unsecured note accrued at a rate of 8% per annum. All principal and accrued interest under the unsecured note was due one year following the issue date of the unsecured note and was convertible into shares of common stock at a conversion price equal to 75% of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion. | ||||||||||||||||||||||||||||||||
Convertible Promissory Notes [Member] | Inter Cloud [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Description of promissory note | On May 6, 2019, the remaining principal balance of $1,445,625 was converted into shares of the Company’s common stock through an automatic forced conversion. | ||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 55,124 | ||||||||||||||||||||||||||||||||
Working capital adjustment | $ 295,000 | ||||||||||||||||||||||||||||||||
Convertible Promissory Notes [Member] | Inter Cloud [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Gain loss on settlement of debt | $ 2,000,000 | ||||||||||||||||||||||||||||||||
Convertible Note [Member] | Designated as Hedging Instrument [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Debt instrument, interest rate terms, description | The note was originally due on August 16, 2019 and bore interest at 1% per annum. The note was convertible into common shares of the Company at a conversion price equal to the 80% of the lowest volume-weighted average price during the 5 trading days immediately preceding the date of conversion. | ||||||||||||||||||||||||||||||||
Notes payable | 639,000 | ||||||||||||||||||||||||||||||||
Base compensation | $ 793,894 | ||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 793,894 | $ 793,894 | |||||||||||||||||||||||||||||||
Fair value of the warrants | $ 2,455,000 | ||||||||||||||||||||||||||||||||
Promissory note issued to Keith Hayter [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Bearing interest rate, per annum | 10.00% | ||||||||||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||||||||||
Keith Hayter [Member] | President Two [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Bearing interest rate, per annum | 10.00% | ||||||||||||||||||||||||||||||||
Keith Hayter [Member] | President One [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Bearing interest rate, per annum | 10.00% | ||||||||||||||||||||||||||||||||
Convertible promissory note, InterCloud Systems, Inc. [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Description of promissory note | The interest on the outstanding principal due under the ADEX note accrued at a rate of 6% per annum. All principal and accrued interest under the ADEX note was due one year following the issue date of the ADEX note and was convertible into shares of common stock at a conversion price equal to of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion, but in no event ever lower than $300 (the “Floor”), unless the note was in default, at which time the Floor would have terminated. | ||||||||||||||||||||||||||||||||
Debt instrument, interest rate terms, description | the holder of the convertible promissory note entered into agreement to sell and assign a total of $50,000 of the outstanding principal to a third party. The Company accounted for the assignments in accordance with ASC 470-50 “Modifications and Extinguishments”. In accordance with ASC 470-50, the Company accounted for the assignment as a debt extinguishment and adjusted the fair value of the derivative to its fair value on the assignment date. | ||||||||||||||||||||||||||||||||
WaveTech GmbH [Member] | |||||||||||||||||||||||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||||||||||||||||||||||
Bearing interest rate, per annum | 8.00% | ||||||||||||||||||||||||||||||||
Loan received in cash | $ 1,325,895 | ||||||||||||||||||||||||||||||||
Additional loan received | $ 10,022 |
Related Party Transactions (D_2
Related Party Transactions (Details) - Schedule of related party transactions - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Total | $ 701,258 | $ 3,701,258 | |
Promissory note issued to Roger Ponder [Member] | |||
Related Party Transaction [Line Items] | |||
Total | 18,858 | 18,858 | |
Promissory note issued to Keith Hayter [Member] | |||
Related Party Transaction [Line Items] | |||
Total | 130,000 | 130,000 | |
Promissory note issued to Keith Hayter One [Member] | |||
Related Party Transaction [Line Items] | |||
Total | 85,000 | 85,000 | |
Promissory note issued to Keith Hayter Two [Member] | |||
Related Party Transaction [Line Items] | |||
Total | 80,000 | 80,000 | |
Promissory note issued to Keith Hayter Three [Member] | |||
Related Party Transaction [Line Items] | |||
Total | 170,000 | 170,000 | |
Promissory note issued to InterCloud Systems, Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Total | 217,400 | 217,400 | |
Loan with WaveTech GmbH, [Member] | |||
Related Party Transaction [Line Items] | |||
Total | [1] | $ 3,000,000 | |
[1] | As of March 31, 2020, in connection with amounts owed to the Company from WaveTech GmbH, the loan with WaveTech GmbH is now being netted against amounts due from WaveTech GmbH (refer to Note 3, Due From Related Party, for additional detail). |
Related Party Transactions (D_3
Related Party Transactions (Details) - Schedule of related party transactions (Parentheticals) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Promissory note issued to Roger Ponder [Member] | ||
Related Party Transaction [Line Items] | ||
Interest rate | 10.00% | |
Promissory note issued to Keith Hayter [Member] | ||
Related Party Transaction [Line Items] | ||
Interest rate | 10.00% | |
Promissory note issued to Keith Hayter One [Member] | ||
Related Party Transaction [Line Items] | ||
Interest rate | 10.00% | 8.00% |
Maturity date | Apr. 13, 2020 | |
Promissory note issued to Keith Hayter Two [Member] | ||
Related Party Transaction [Line Items] | ||
Interest rate | 8.00% | |
Promissory note issued to Keith Hayter Three [Member] | ||
Related Party Transaction [Line Items] | ||
Interest rate | 10.00% | |
Maturity date | Aug. 11, 2020 | |
Loan with WaveTech GmbH, [Member] | ||
Related Party Transaction [Line Items] | ||
Interest rate | 8.00% |
Loans Payable (Details)
Loans Payable (Details) - USD ($) | May 06, 2019 | Jan. 04, 2019 | Oct. 10, 2018 | Jun. 18, 2020 | May 08, 2020 | Dec. 10, 2019 | Aug. 16, 2019 | Jul. 03, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Feb. 04, 2019 | Dec. 31, 2018 | Apr. 12, 2017 | Mar. 31, 2012 |
Loans Payable (Details) [Line Items] | |||||||||||||||
Common stock subscribed | $ 74,742 | $ 74,742 | |||||||||||||
Description of loan payable | On May 6, 2019, the remaining principal balance of $1,452,299 was converted into shares of the Company’s common stock through an automatic forced conversion. | In addition, the Company issued a warrant (the “Warrant”) to the Lender to purchase an amount of shares of the Company’s common stock equal to $150,000 divided by the Warrant Price (as defined in the Warrant) at a price per share equal to 125% of the prior day’s closing price. | On February 21, 2018, the Company issued a convertible note with a principal amount of $500,000 and a warrant with a term of three years to purchase up to 417 shares of common stock of the Company at an exercise price of $480.00 per share to Barn 11. The exercise price of the warrant was to reduce to 85% of the closing price of the Company’s common stock if the closing price of the Company’s common stock was less than $480.00 on July 31, 2018. The note was due on January 15, 2019, and in February 2019, the maturity date was extended to June 1, 2019, and bears interest at 6% per annum. The note is convertible into common shares of the Company at a conversion price equal to the lower of 80% of the lowest volume-weighted average price during the 5 trading days immediately preceding the date of conversion and $300.00 (the “Floor”), unless the note is in default, at which time the Floor terminates. The embedded conversion option and warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $571,079 and the warrant of $158,772 resulted in a discount to the note payable of $500,000 and an initial derivative expense of $229,851. On June 1, 2019, the Company was in default on the note. As a result of the default, a 15% premium was added to the balance owed, including all accrued interest. Subsequent to the default, the new principal balance of the note is $619,362, with interest now accruing at 18% per annum. Additionally, $466,000 was added to the derivative liability balance in connection with the default. During the year ended December 31, 2019, the Company paid $25,000 of principal. The Company owed $594,362 as of March 31, 2020. Convertible promissory note, Dominion Capital, 12% interest, unsecured, matures October 17, 2020 On April 17, 2019, Dominion Capital exchanged two notes into a new note (the “Exchange Note”) with a principal amount of $1,571,134. Interest accrues on the new note at 12% per annum. All principal and accrued interest under the Exchange Note is due on October 17, 2020 and is convertible into shares of the Company’s common stock. The conversion price in effect on the date such conversion is effected shall be equal to (i) initially, $30.00 or (ii) on or after the date of the closing of the next public or private offering of equity or equity-linked securities of the Company in which the Company receives gross proceeds in an amount greater than $100,000, one hundred and five percent (105%) of the price of the common stock issuable in the offering. While during the first six months that the Exchange Note is outstanding, only interest payments are due to the holder, beginning in October 2019, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under the Exchange Note. The Exchange Note includes customary events of default, including non-payment of the principal or accrued interest due on the Exchange Note. Upon an event of default, all obligations under the Exchange Note will become immediately due and payable. The Holder was granted a right to participate in future financing transactions of the Company while the Exchange Note remains outstanding. As a result of the beneficial conversion feature associated with the Dominion notes, $314,228 was added to additional paid-in capital during the year ended December 31, 2019. In connection with the exchange, the Company recorded a loss on settlement of debt of $904,469 on the consolidated statement of operations for the year ended December 31, 2019. The Company was to begin making principal payments in equal installments beginning on October 1, 2019. On October 22, 2019, the Company reached an agreement with Dominion Capital to postpone the principal payments. In exchange for the extension, the Company will pay to Dominion Capital an extension fee equal to 14% of the postponed payments. As a result of this agreement, the Company added $47,731 of principal to note during the year ended December 31, 2019 and the three months ended March 31, 2020. During the year ended December 31, 2019 and the three months ended March 31, 2020, the Company paid $51,848 of principal. The Company owed $1,562,901 as of March 31, 2020 and will record accretion equal to the debt discount of $50,443 over the remaining term of the note. Convertible promissory note issued in connection with the acquisition of TNS, Inc. On January 4, 2019, as part of the acquisition described in Note 3, Acquisition of TNS, Inc., the Company issued to InterCloud a convertible promissory note in the aggregate principal amount of $620,000 (the “Note”). The interest on the outstanding principal due under the Note accrued at a rate of 6% per annum. All principal and accrued interest under the Note was due January 30, 2020, and was convertible, at any time at InterCloud’s election, into shares of common stock of the Company at a conversion price equal to the greater of 75% of the lowest volume-weighted average price during the 10 trading days immediately preceding the date of conversion and $30.00. The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $189,000 resulted in a discount to the note payable of $144,000. On January 28, 2019, the holder of the convertible promissory note entered into agreement to sell and assign a total of $620,000 of the $620,000 outstanding principal to two third parties, with $186,000 and $434,000 of principal assigned to each party (refer to the “Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020” and “Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020” sections of this note for further detail). The Company approved and is bound by the assignment and sale agreement. Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020 On January 28, 2019, InterCloud assigned $186,000 of the note issued in connection with the acquisition of TNS to Michael Roeske. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Roeske converted $70,000 of principal of the note into shares of the Company’s common stock. The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $29,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $145,000 pursuant to this agreement. Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020 On January 28, 2019, InterCloud assigned $434,000 of the note issued in connection with the acquisition of TNS to Joel Raven. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Raven converted $70,000 of principal of the note into shares of the Company’s common stock The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $91,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $455,000 pursuant to this agreement. Convertible promissory note, GS Capital Partners, LLC, 8% interest, secured, matures August 2, 2020 On August 2, 2019, the Company entered into and closed on a Securities Purchase Agreement with GS Capital Partners, LLC, pursuant to which the Company issued to GS Capital Partners, LLC a senior secured convertible promissory note in the aggregate principal amount of $123,000 for an aggregate purchase price of $112,000. The interest on the outstanding principal due under the secured note accrued at a rate of 8% per annum. | ||||||||||||
Interest payable prime rate, percentage | 2.00% | ||||||||||||||
Debt discount | 39,409 | 280,174 | |||||||||||||
Repaid on aggregate amount | 51,847 | $ 334,552 | |||||||||||||
Principal amount | 299,972 | $ 1,325,895 | |||||||||||||
Loan and Security Agreement [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | 3,122,638 | ||||||||||||||
Description of loan payable | Under the Loan and Security Agreement, the Borrower may borrow an aggregate outstanding amount not to exceed the lesser of up to (i) $5,000,000 or (ii) the Borrowing Base (as defined in the Loan and Security Agreement) through one or more advances through October 10, 2020 (the “Maturity Date”), subject to the Lender’s satisfactory annual review of the Borrower which is currently ongoing. | ||||||||||||||
Debt discount | 149,180 | ||||||||||||||
Received on aggregate amount | 6,167,328 | 26,772,037 | |||||||||||||
Repaid on aggregate amount | 3,142,796 | 27,132,642 | |||||||||||||
Repaid net amount | 360,605 | ||||||||||||||
Loss on settlement of debt | 149,180 | ||||||||||||||
Financing Agreement [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | 0 | ||||||||||||||
Description of loan payable | Pursuant to the terms of the Financing Agreement, the Company agreed to pay Libertas $31,602 each week based upon an anticipated 20% of its future receivables until such time as $1,460,000 had been paid, a period Libertas and the Financing Parties estimated to be approximately eleven months. | ||||||||||||||
Warrant [Member] | Loan and Security Agreement [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | $ 3,483,015 | ||||||||||||||
Common stock subscribed | $ 150,000 | ||||||||||||||
Debt discount | $ (257,194) | ||||||||||||||
Common Stock [Member] | Loan and Security Agreement [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Description of loan payable | the Company also issued a warrant to purchase 380 shares of the Company’s common stock at $375.00 per share for three years. The fair value of the warrants of $87,410 and $190,000 of debt issuance costs resulted in a discount to the note payable of $277,410 | ||||||||||||||
Promissory note issued to J. Thacker [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | 41,361 | ||||||||||||||
Promissory note issued to 0738856 BC ltd [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | 2,636 | ||||||||||||||
Promissory note issued to S. Kahn [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | 3,400 | ||||||||||||||
Promissory note issued to 0738856 BC ltd [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | 15,000 | 15,000 | |||||||||||||
Subscription amount due to T. Warkentin [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Common stock subscribed | 50,000 | 50,000 | $ 50,000 | ||||||||||||
Common stock share subscriptions (in Shares) | 167 | ||||||||||||||
Promissory note issued to Old Main Capital LLC [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Promissory note | $ 12,000 | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Description of loan payable | the Company made the fourth amendment to the Certificate of Designation of its Series A preferred stock, which lowered the fixed conversion price to $0.20 per share and the conversion price floor to $0.01 per share. | ||||||||||||||
Promissory note issued to S. Kahn [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | 7,760 | ||||||||||||||
Promissory note issued to Bluekey Energy [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | 7,500 | ||||||||||||||
Promissory note issued to Old Main Capital LLC [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | $ 12,000 | 12,000 | |||||||||||||
Promissory note issued to Old Main Capital LLC [Member] | Unsecured Debt [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Interest rate | 10.00% | ||||||||||||||
Loan with Heritage Bank [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Description of loan payable | Loan with Heritage Bank of Commerce, interest rate of prime plus 2%, secured by all assets of the Company, matures October 20, 2020 | ||||||||||||||
Loan with Heritage Bank [Member] | Secured Debt [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Interest rate | 2.00% | ||||||||||||||
Loan with Libertas Funding LLC [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Debt discount | $ 11,260 | 31,365 | |||||||||||||
Loan with Libertas Funding LLC [Member] | Financing Agreement [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Description of loan payable | Under the Financing Agreement, the Financing Parties sold to Libertas future receivables in an aggregate amount equal to $1,460,000 for a purchase price of $1,000,000. | ||||||||||||||
Loan with WaveTech Global, Inc [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Maturity date | Apr. 28, 2019 | ||||||||||||||
Loan with C6 Capital [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | $ 0 | ||||||||||||||
Debt discount | $ 95,000 | 11,260 | |||||||||||||
Loss on settlement of debt | 1,490 | ||||||||||||||
Aggregate amount | 337,500 | ||||||||||||||
Purchase price | 250,000 | ||||||||||||||
Cash | $ 242,500 | ||||||||||||||
Original balance | 156,696 | 180,804 | |||||||||||||
Loan with Pawn Funding [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | 71,719 | ||||||||||||||
Description of loan payable | Pursuant to the terms of the Financing Agreement, the Company agreed to pay Pawn Funding $4,219 each week based upon an anticipated 15% of its future receivables until such time as $135,000 has been paid, a period Pawn Funding and the Financing Parties estimate to be approximately eight months. | ||||||||||||||
Aggregate amount | $ 135,000 | ||||||||||||||
Purchase price | 100,000 | ||||||||||||||
Cash | 97,000 | ||||||||||||||
Original balance | 54,844 | 8,437 | |||||||||||||
Debt discount | $ 38,000 | ||||||||||||||
Loan with RDM Capital Funding [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | 179,295 | ||||||||||||||
Description of loan payable | Pursuant to the terms of the Financing Agreement, the Company agreed to pay RDM Capital Funding $10,574 each week based upon an anticipated 3% of its future receivables until such time as $337,500 had been paid, a period RDM Capital Funding and the Financing Parties estimated to be approximately eight months. | ||||||||||||||
Debt discount | $ 95,000 | 28,149 | |||||||||||||
Aggregate amount | 337,500 | ||||||||||||||
Purchase price | 250,000 | ||||||||||||||
Cash | $ 242,500 | ||||||||||||||
Original balance | $ 137,111 | 21,094 | |||||||||||||
Loan with RDM Capital Funding [Member] | Subsequent Event [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Cash discount | $ 62,652 | ||||||||||||||
Canada, Dollars | Promissory note issued to J. Thacker [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | 53,300 | ||||||||||||||
Canada, Dollars | Promissory note issued to S. Kahn [Member] | |||||||||||||||
Loans Payable (Details) [Line Items] | |||||||||||||||
Owed to a non-related party | $ 10,000 |
Loans Payable (Details) - Sched
Loans Payable (Details) - Schedule of loans payable - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Dividends Payable [Line Items] | ||
Loans payable | $ 347,862 | $ 3,578,386 |
Promissory note issued to J. Thacker [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 41,361 | 41,361 |
Promissory note issued to S. Kahn [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 7,760 | 7,760 |
Promissory note issued to 0738856 BC ltd [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 2,636 | 2,636 |
Promissory note issued to 0738856 BC Ltd [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 15,000 | 15,000 |
Promissory note issued to Bluekey Energy [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 7,500 | 7,500 |
Promissory note issued to Old Main Capital LLC [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 12,000 | 12,000 |
Promissory note issued to Pawn Funding [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 60,459 | 94,928 |
Promissory note issued to RDM Capital Funding [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 151,146 | 237,319 |
Promissory note issued to C6 Capital [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 136,424 | |
Subscription amount due to T. Warkentin [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | $ 50,000 | 50,000 |
Loan with Heritage Bank of Commerce [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | $ 2,973,458 |
Loans Payable (Details) - Sch_2
Loans Payable (Details) - Schedule of loans payable (Parentheticals) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Promissory note issued to Pawn Funding [Member] | ||
Dividends Payable [Line Items] | ||
Debt discount | $ 11,260 | $ 31,365 |
Promissory note issued to RDM Capital Funding [Member] | ||
Dividends Payable [Line Items] | ||
Debt discount | $ 28,149 | 79,087 |
Loan with Heritage Bank [Member] | Secured Debt [Member] | ||
Dividends Payable [Line Items] | ||
Debt discount | 149,180 | |
Promissory note issued to C6 Capital [Member] | ||
Dividends Payable [Line Items] | ||
Debt discount | $ 20,272 |
Convertible Debentures (Details
Convertible Debentures (Details) - USD ($) | May 06, 2020 | Feb. 07, 2020 | Nov. 12, 2019 | May 06, 2019 | Oct. 10, 2018 | Feb. 21, 2018 | Jun. 18, 2020 | Nov. 27, 2019 | Nov. 21, 2019 | Oct. 24, 2019 | Oct. 22, 2019 | Sep. 17, 2019 | Sep. 01, 2019 | Aug. 02, 2019 | Apr. 17, 2019 | Jan. 28, 2019 | Jan. 28, 2019 | Dec. 04, 2018 | Sep. 26, 2018 | Sep. 26, 2018 | Jul. 03, 2018 | May 18, 2018 | Apr. 27, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jun. 26, 2020 | Jun. 19, 2020 | Jun. 09, 2020 | Apr. 30, 2020 | Sep. 30, 2019 | Sep. 02, 2019 | Jun. 01, 2019 | Jan. 04, 2019 | Jul. 31, 2018 | Apr. 23, 2018 | Aug. 27, 2017 | |
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 8.00% | |||||||||||||||||||||||||||||||||||||
Debt Instrument, description | On May 6, 2019, the remaining principal balance of $1,452,299 was converted into shares of the Company’s common stock through an automatic forced conversion. | In addition, the Company issued a warrant (the “Warrant”) to the Lender to purchase an amount of shares of the Company’s common stock equal to $150,000 divided by the Warrant Price (as defined in the Warrant) at a price per share equal to 125% of the prior day’s closing price. | On February 21, 2018, the Company issued a convertible note with a principal amount of $500,000 and a warrant with a term of three years to purchase up to 417 shares of common stock of the Company at an exercise price of $480.00 per share to Barn 11. The exercise price of the warrant was to reduce to 85% of the closing price of the Company’s common stock if the closing price of the Company’s common stock was less than $480.00 on July 31, 2018. The note was due on January 15, 2019, and in February 2019, the maturity date was extended to June 1, 2019, and bears interest at 6% per annum. The note is convertible into common shares of the Company at a conversion price equal to the lower of 80% of the lowest volume-weighted average price during the 5 trading days immediately preceding the date of conversion and $300.00 (the “Floor”), unless the note is in default, at which time the Floor terminates. The embedded conversion option and warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $571,079 and the warrant of $158,772 resulted in a discount to the note payable of $500,000 and an initial derivative expense of $229,851. On June 1, 2019, the Company was in default on the note. As a result of the default, a 15% premium was added to the balance owed, including all accrued interest. Subsequent to the default, the new principal balance of the note is $619,362, with interest now accruing at 18% per annum. Additionally, $466,000 was added to the derivative liability balance in connection with the default. During the year ended December 31, 2019, the Company paid $25,000 of principal. The Company owed $594,362 as of March 31, 2020. Convertible promissory note, Dominion Capital, 12% interest, unsecured, matures October 17, 2020 On April 17, 2019, Dominion Capital exchanged two notes into a new note (the “Exchange Note”) with a principal amount of $1,571,134. Interest accrues on the new note at 12% per annum. All principal and accrued interest under the Exchange Note is due on October 17, 2020 and is convertible into shares of the Company’s common stock. The conversion price in effect on the date such conversion is effected shall be equal to (i) initially, $30.00 or (ii) on or after the date of the closing of the next public or private offering of equity or equity-linked securities of the Company in which the Company receives gross proceeds in an amount greater than $100,000, one hundred and five percent (105%) of the price of the common stock issuable in the offering. While during the first six months that the Exchange Note is outstanding, only interest payments are due to the holder, beginning in October 2019, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under the Exchange Note. The Exchange Note includes customary events of default, including non-payment of the principal or accrued interest due on the Exchange Note. Upon an event of default, all obligations under the Exchange Note will become immediately due and payable. The Holder was granted a right to participate in future financing transactions of the Company while the Exchange Note remains outstanding. As a result of the beneficial conversion feature associated with the Dominion notes, $314,228 was added to additional paid-in capital during the year ended December 31, 2019. In connection with the exchange, the Company recorded a loss on settlement of debt of $904,469 on the consolidated statement of operations for the year ended December 31, 2019. The Company was to begin making principal payments in equal installments beginning on October 1, 2019. On October 22, 2019, the Company reached an agreement with Dominion Capital to postpone the principal payments. In exchange for the extension, the Company will pay to Dominion Capital an extension fee equal to 14% of the postponed payments. As a result of this agreement, the Company added $47,731 of principal to note during the year ended December 31, 2019 and the three months ended March 31, 2020. During the year ended December 31, 2019 and the three months ended March 31, 2020, the Company paid $51,848 of principal. The Company owed $1,562,901 as of March 31, 2020 and will record accretion equal to the debt discount of $50,443 over the remaining term of the note. Convertible promissory note issued in connection with the acquisition of TNS, Inc. On January 4, 2019, as part of the acquisition described in Note 3, Acquisition of TNS, Inc., the Company issued to InterCloud a convertible promissory note in the aggregate principal amount of $620,000 (the “Note”). The interest on the outstanding principal due under the Note accrued at a rate of 6% per annum. All principal and accrued interest under the Note was due January 30, 2020, and was convertible, at any time at InterCloud’s election, into shares of common stock of the Company at a conversion price equal to the greater of 75% of the lowest volume-weighted average price during the 10 trading days immediately preceding the date of conversion and $30.00. The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $189,000 resulted in a discount to the note payable of $144,000. On January 28, 2019, the holder of the convertible promissory note entered into agreement to sell and assign a total of $620,000 of the $620,000 outstanding principal to two third parties, with $186,000 and $434,000 of principal assigned to each party (refer to the “Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020” and “Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020” sections of this note for further detail). The Company approved and is bound by the assignment and sale agreement. Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020 On January 28, 2019, InterCloud assigned $186,000 of the note issued in connection with the acquisition of TNS to Michael Roeske. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Roeske converted $70,000 of principal of the note into shares of the Company’s common stock. The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $29,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $145,000 pursuant to this agreement. Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020 On January 28, 2019, InterCloud assigned $434,000 of the note issued in connection with the acquisition of TNS to Joel Raven. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Raven converted $70,000 of principal of the note into shares of the Company’s common stock The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $91,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $455,000 pursuant to this agreement. Convertible promissory note, GS Capital Partners, LLC, 8% interest, secured, matures August 2, 2020 On August 2, 2019, the Company entered into and closed on a Securities Purchase Agreement with GS Capital Partners, LLC, pursuant to which the Company issued to GS Capital Partners, LLC a senior secured convertible promissory note in the aggregate principal amount of $123,000 for an aggregate purchase price of $112,000. The interest on the outstanding principal due under the secured note accrued at a rate of 8% per annum. | |||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 135,000 | |||||||||||||||||||||||||||||||||||||
Exercise price (in Dollars per share) | $ 7.80 | |||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate terms, description | the holder of the convertible promissory note entered into agreement to sell and assign a total of $75,000 of the outstanding principal to a third party. The Company approved and was bound by the assignment and sale agreement. As a result of the assignment, the assigned note bore interest at 5% and the conversion price for the $75,000 of notes assigned was equal to the lesser 75% of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion and $2,400.00. On December 3, 2018, the holder of the convertible promissory note entered into agreement to sell and assign a total of $50,000 of the outstanding principal to a third party. | |||||||||||||||||||||||||||||||||||||
Fair value of the warrants | $ 838,062 | |||||||||||||||||||||||||||||||||||||
Derivative expenses | [1] | 2,063,063 | $ 992,733 | |||||||||||||||||||||||||||||||||||
Additional paid-in capital | 34,174,562 | 25,255,291 | ||||||||||||||||||||||||||||||||||||
Loss on settlement of debt | (190,902) | $ 164,467 | ||||||||||||||||||||||||||||||||||||
Principal note | $ 47,731 | |||||||||||||||||||||||||||||||||||||
Fair value of conversion feature | 308,000 | |||||||||||||||||||||||||||||||||||||
original issue discount | 35,000 | 20,000 | ||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 293,165 | |||||||||||||||||||||||||||||||||||||
SCS, LLC [Member] | Unsecured Debt [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Convertible promissory note, maturity date | Mar. 30, 2020 | |||||||||||||||||||||||||||||||||||||
GS Capital Partners, LLC [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, description | The secured note was convertible into shares of the Company’s common stock at 71% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. The conversion price had a floor of $3.00 per share. | |||||||||||||||||||||||||||||||||||||
GS Capital Partners, LLC [Member] | Unsecured Debt [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 8.00% | |||||||||||||||||||||||||||||||||||||
Dominion Capital Three [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, description | The conversion price in effect on the date such conversion is effected shall be equal to (i) initially, $30.00 or (ii) on or after the date of the closing of the next public or private offering of equity or equity-linked securities of the Company in which the Company receives gross proceeds in an amount greater than $100,000, one hundred and five percent (105%) of the price of the common stock issuable in the offering. While during the first six months that the Exchange Note is outstanding, only interest payments are due to the holder, beginning in October 2019, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under the Exchange Note. | |||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 51,848 | |||||||||||||||||||||||||||||||||||||
Convertible Note One [Member] | Barn [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Aggregate principal amount | 25,000 | |||||||||||||||||||||||||||||||||||||
Face owed amount | $ 594,362 | |||||||||||||||||||||||||||||||||||||
Convertible Note One [Member] | Barn [Member] | Derivative And Hedging [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 18.00% | |||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 500,000 | |||||||||||||||||||||||||||||||||||||
Issued shares of common stock (in Shares) | 417 | |||||||||||||||||||||||||||||||||||||
Exercise price (in Dollars per share) | $ 480 | |||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate terms, description | The exercise price of the warrant was to reduce to 85% of the closing price of the Company’s common stock if the closing price of the Company’s common stock was less than $480.00 on July 31, 2018. The note was due on January 15, 2019, and in February 2019, the maturity date was extended to June 1, 2019, and bears interest at 6% per annum. The note is convertible into common shares of the Company at a conversion price equal to the lower of 80% of the lowest volume-weighted average price during the 5 trading days immediately preceding the date of conversion and $300.00 (the “Floor”), unless the note is in default, at which time the Floor terminates. | |||||||||||||||||||||||||||||||||||||
Fair value of the conversion feature | $ 571,079 | |||||||||||||||||||||||||||||||||||||
Fair value of the warrants | 158,772 | |||||||||||||||||||||||||||||||||||||
Notes payable | 500,000 | |||||||||||||||||||||||||||||||||||||
Derivative expenses | $ 229,851 | $ 466,000 | ||||||||||||||||||||||||||||||||||||
Convertible Note One [Member] | Dominion Capital Two [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, description | During the year ended December 31, 2019, the Company paid $25,000 of principal. The Company owed $594,362 as of March 31, 2020. Convertible promissory note, Dominion Capital, 12% interest, unsecured, matures October 17, 2020 On April 17, 2019, Dominion Capital exchanged two notes into a new note (the “Exchange Note”) with a principal amount of $1,571,134. Interest accrues on the new note at 12% per annum. All principal and accrued interest under the Exchange Note is due on October 17, 2020 and is convertible into shares of the Company’s common stock. The conversion price in effect on the date such conversion is effected shall be equal to (i) initially, $30.00 or (ii) on or after the date of the closing of the next public or private offering of equity or equity-linked securities of the Company in which the Company receives gross proceeds in an amount greater than $100,000, one hundred and five percent (105%) of the price of the common stock issuable in the offering. While during the first six months that the Exchange Note is outstanding, only interest payments are due to the holder, beginning in October 2019, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under the Exchange Note. The Exchange Note includes customary events of default, including non-payment of the principal or accrued interest due on the Exchange Note. Upon an event of default, all obligations under the Exchange Note will become immediately due and payable. The Holder was granted a right to participate in future financing transactions of the Company while the Exchange Note remains outstanding. As a result of the beneficial conversion feature associated with the Dominion notes, $314,228 was added to additional paid-in capital during the year ended December 31, 2019. In connection with the exchange, the Company recorded a loss on settlement of debt of $904,469 on the consolidated statement of operations for the year ended December 31, 2019. The Company was to begin making principal payments in equal installments beginning on October 1, 2019. On October 22, 2019, the Company reached an agreement with Dominion Capital to postpone the principal payments. In exchange for the extension, the Company will pay to Dominion Capital an extension fee equal to 14% of the postponed payments. As a result of this agreement, the Company added $47,731 of principal to note during the year ended December 31, 2019 and the three months ended March 31, 2020. During the year ended December 31, 2019 and the three months ended March 31, 2020, the Company paid $51,848 of principal. The Company owed $1,562,901 as of March 31, 2020 and will record accretion equal to the debt discount of $50,443 over the remaining term of the note. Convertible promissory note issued in connection with the acquisition of TNS, Inc. On January 4, 2019, as part of the acquisition described in Note 3, Acquisition of TNS, Inc., the Company issued to InterCloud a convertible promissory note in the aggregate principal amount of $620,000 (the “Note”). The interest on the outstanding principal due under the Note accrued at a rate of 6% per annum. All principal and accrued interest under the Note was due January 30, 2020, and was convertible, at any time at InterCloud’s election, into shares of common stock of the Company at a conversion price equal to the greater of 75% of the lowest volume-weighted average price during the 10 trading days immediately preceding the date of conversion and $30.00. The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $189,000 resulted in a discount to the note payable of $144,000. On January 28, 2019, the holder of the convertible promissory note entered into agreement to sell and assign a total of $620,000 of the $620,000 outstanding principal to two third parties, with $186,000 and $434,000 of principal assigned to each party (refer to the “Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020” and “Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020” sections of this note for further detail). The Company approved and is bound by the assignment and sale agreement. Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020 On January 28, 2019, InterCloud assigned $186,000 of the note issued in connection with the acquisition of TNS to Michael Roeske. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Roeske converted $70,000 of principal of the note into shares of the Company’s common stock. The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $29,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $145,000 pursuant to this agreement. Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020 On January 28, 2019, InterCloud assigned $434,000 of the note issued in connection with the acquisition of TNS to Joel Raven. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Raven converted $70,000 of principal of the note into shares of the Company’s common stock The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $91,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $455,000 pursuant to this agreement. Convertible promissory note, GS Capital Partners, LLC, 8% interest, secured, matures August 2, 2020 On August 2, 2019, the Company entered into and closed on a Securities Purchase Agreement with GS Capital Partners, LLC, pursuant to which the Company issued to GS Capital Partners, LLC a senior secured convertible promissory note in the aggregate principal amount of $123,000 for an aggregate purchase price of $112,000. The interest on the outstanding principal due under the secured note accrued at a rate of 8% per annum. All principal and accrued but unpaid interest under the secured note was originally due on August 2, 2020. The secured note was convertible into shares of the Company’s common stock at 71% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. The conversion price had a floor of $3.00 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $28,000 resulted in an additional discount to the note payable of $28,000, for a total debt discount of $39,000. During the three months ended March 31, 2020, the holder of the note converted $23,000 of principal and $1,026 of accrued interest into shares of the Company’s common stock (refer to Note 11, Common Stock, for additional information). As a result of these conversions, the Company recorded a loss on settlement of debt of $40,232 to the unaudited condensed consolidated statement of operations for the three months ended March 31, 2020. At March 31, 2020, the Company owed $100,000 pursuant to this agreement and was to record accretion equal to the debt discount of $13,891 over the remaining term of the note. On April 30, 2020, the holder of the note converted the remaining $100,000 of principal and $5,742 of accrued interest into shares of the Company’s common stock (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, GS Capital Partners, LLC, 8% interest, unsecured, matures October 24, 2020 On October 24, 2019, the Company entered into and closed on a Securities Purchase Agreement with GS Capital Partners, LLC, pursuant to which the Company issued to GS Capital Partners, LLC a convertible promissory note in the aggregate principal amount of $123,000 for an aggregate purchase price of $112,000. The interest on the outstanding principal due under the note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the note is due on October 24, 2020. The note is convertible into shares of the Company’s common stock at 71% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. The conversion price has a floor of $3.00 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $20,000 resulted in an additional discount to the note payable of $20,000, for a total debt discount of $31,000. At March 31, 2020, the Company owed $123,000 pursuant to this agreement and will record accretion equal to the debt discount of $16,778 over the remaining term of the note. Convertible promissory note, SCS, LLC, 8% interest, unsecured, matured March 30, 2020 On September 1, 2019, the Company entered into and closed on a Securities Purchase Agreement with SCS, LLC, pursuant to which the Company issued to SCS, LLC an unsecured convertible promissory note in the aggregate principal amount of $51,030 in exchange for rent. The interest on the outstanding principal due under the unsecured note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the secured note and has a maturity date of March 30, 2020. The secured note is convertible into shares of the Company’s common stock at 75% of the lowest average VWAP in the 15 trading days prior to the conversion date. The conversion price has a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $29,000 resulted in a discount to the note payable of $29,000. The note matured on March 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $12,758. The interest also increased from 8% per annum to 24% per annum. At March 31, 2020, the Company owed $63,788 pursuant to this agreement. On June 19, 2020, the holder of the note began converting principal and accrued interest into shares of the Company’s common stock (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures September 17, 2020 On September 17, 2019, the Company entered into and closed on a Securities Purchase Agreement with Power Up Lending Group LTD. (“Power Up Lending”), pursuant to which the Company issued to Power Up Lending a convertible promissory note in the aggregate principal amount of $148,000 for an aggregate purchase price of $135,000. The Company received the cash on October 1, 2019. The interest on the outstanding principal due under the note accrued at a rate of 8% per annum. All principal and accrued but unpaid interest under the note was originally due on September 17, 2020. The note was convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. The conversion price had a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $159,000 resulted in an additional discount to the note payable of $135,000, for a total debt discount of $148,000. The remaining $24,000 of the initial fair value of the conversion feature was recorded as initial derivative expense on the consolidated statement of operations for the year ended December 31, 2019. At March 31, 2020, the Company owed $148,000 pursuant to this agreement and was to record accretion equal to the debt discount of $75,861 over the remaining term of the note. On April 1 2020, the holder of the note began converting principal into shares of the Company’s common stock. Between that date and June 9, 2020, the holder of the note converted the full principal amount of the note along with the accrued interest (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures January 22, 2021 On October 22, 2019, the Company entered into and closed on a Securities Purchase Agreement with Power Up Lending Group LTD. (“Power Up Lending”), pursuant to which the Company issued to Power Up Lending a convertible promissory note in the aggregate principal amount of $68,500 for an aggregate purchase price of $60,000. The interest on the outstanding principal due under the note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the note is due on January 22, 2021. The note is convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. The conversion price has a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $56,000 resulted in an additional discount to the note payable of $56,000, for a total debt discount of $64,500. At March 31, 2020, the Company owed $68,500 pursuant to this agreement and will record accretion equal to the debt discount of $40,751 over the remaining term of the note. On June 9, 2020, the holder of the note began converting principal into shares of the Company’s common stock (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures February 26, 2021 On November 27, 2019, the Company entered into and closed on a Securities Purchase Agreement with Power Up Lending Group LTD. (“Power Up Lending”), pursuant to which the Company issued to Power Up Lending a convertible promissory note in the aggregate principal amount of $58,000 for an aggregate purchase price of $50,000. The interest on the outstanding principal due under the note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the note is due on February 26, 2021. The note is convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. The conversion price has a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $43,000 resulted in an additional discount to the note payable of $43,000, for a total debt discount of $51,000. At March 31, 2020, the Company owed $58,000 pursuant to this agreement and will record accretion equal to the debt discount of $35,417 over the remaining term of the note. Convertible promissory note, Crown Bridge Partners, LLC, 10% interest, unsecured, matures November 21, 2020 On November 12, 2019, the Company entered into and closed on a Securities Purchase Agreement with Crown Bridge Partners, LLC, pursuant to which the Company issued to Crown Bridge Partners, LLC a convertible promissory note in the aggregate principal amount of $225,000 for an aggregate purchase price of $202,500. The Company received the first tranche of $75,000 on November 21, 2019 for an aggregate purchase price of $65,500. The Company also issued a warrant equal to the face amount of the note with a term of three years to purchase 2,500 shares of common stock at an exercise price of $30.00 per share. The interest on the outstanding principal due under the first tranche of the note accrues at a rate of 10% per annum. All principal and accrued but unpaid interest under the first tranche of the note is due on November 21, 2020. The first tranche of the note is convertible into shares of the Company’s common stock at 60% of the average of the three lowest VWAPs in the 20 trading days prior to and including the conversion date. The embedded conversion option and warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion option feature of $138,000 and warrant feature of $20,138 resulted in an additional discount to the note payable of $65,500, for a total debt discount of $75,000. The remaining $92,638 of the initial fair value of the conversion feature was recorded as initial derivative expense on the consolidated statement of operations for the year ended December 31, 2019. At March 31, 2020, the Company owed $75,000 pursuant to this agreement and will record accretion equal to the debt discount of $46,898 over the remaining term of the note. Convertible promissory note, CCAG Investments, LLC, 20% interest, secured, matures June 30, 2020 On February 7, 2020, the Company entered into and closed on a Securities Purchase Agreement with CCAG Investments, LLC, pursuant to which the Company issued to CCAG Investments, LLC a secured convertible redeemable note in the aggregate principal amount of $175,000 for an aggregate purchase price of $157,500, resulting in an original issue discount of $17,500. The Company also issued a warrant equal to 50% of the face amount of the note with a term of three years to purchase 9,723 shares of common stock at an initial exercise price of $9.00 per share. The interest on the outstanding principal due under the note accrued at a rate of 20% per annum. All principal and accrued but unpaid under the secured note was originally due on June 30, 2020. The note was convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. In connection with the issuance of the note, the Company also issued to CCAG Investments, LLC 9,755 shares of common stock (refer to Note 11, Common Stock, for additional detail). The embedded conversion option and warrants issued qualified for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature and warrants issued was $42,000 and $64,000, resulting in an additional discount to the note payable of $106,000. The shares issued with the note were valued at $51,500, for a total debt discount of $175,000. The Company had the option of repaying 120% of the principal balance if paid within 90 days of issuance, or 125% of the principal if paid greater than 90 days after issuance. On May 6, 2020, the Company repaid 120% of the principal balance (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, FJ Vulis and Associates LLC, 20% interest, secured, matures June 30, 2020 On February 7, 2020, the Company entered into and closed on a Securities Purchase Agreement with FJ Vulis and Associates, LLC, pursuant to which the Company issued to FJ Vulis and Associates, LLC a secured convertible redeemable note in the aggregate principal amount of $175,000 for an aggregate purchase price of $157,500, resulting in an original issue discount of $17,500. The Company also issued a warrant equal to 50% of the face amount of the note with a term of three years to purchase 9,723 shares of common stock at an initial exercise price of $9.00 per share. The interest on the outstanding principal due under the note accrued at a rate of 20% per annum. All principal and accrued but unpaid under the secured note was originally due on June 30, 2020. The note was convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. In connection with the issuance of the note, the Company also issued to FJ Vulis and Associates, LLC 9,755 shares of common stock (refer to Note 11, Common Stock, for additional detail). The embedded conversion option and warrants issued qualified for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature and warrants issued was $42,000 and $64,000, resulting in an additional discount to the note payable of $106,000. The shares issued with the note were valued at $51,500, for a total debt discount of $175,000. The Company had the option of repaying 120% of the principal balance if paid within 90 days of issuance, or 125% of the principal if paid greater than 90 days after issuance. On May 6, 2020, the Company repaid 120% of the principal balance (refer to Note 17, Subsequent Events, for additional detail). | |||||||||||||||||||||||||||||||||||||
Convertible Note One [Member] | Dominion Capital Two [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 8.00% | |||||||||||||||||||||||||||||||||||||
Convertible Note Five [Member] | SCS, LLC [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, description | The initial fair value of the conversion feature of $571,079 and the warrant of $158,772 resulted in a discount to the note payable of $500,000 and an initial derivative expense of $229,851. On June 1, 2019, the Company was in default on the note. As a result of the default, a 15% premium was added to the balance owed, including all accrued interest. Subsequent to the default, the new principal balance of the note is $619,362, with interest now accruing at 18% per annum. Additionally, $466,000 was added to the derivative liability balance in connection with the default. During the year ended December 31, 2019, the Company paid $25,000 of principal. The Company owed $594,362 as of March 31, 2020. Convertible promissory note, Dominion Capital, 12% interest, unsecured, matures October 17, 2020 On April 17, 2019, Dominion Capital exchanged two notes into a new note (the “Exchange Note”) with a principal amount of $1,571,134. Interest accrues on the new note at 12% per annum. All principal and accrued interest under the Exchange Note is due on October 17, 2020 and is convertible into shares of the Company’s common stock. The conversion price in effect on the date such conversion is effected shall be equal to (i) initially, $30.00 or (ii) on or after the date of the closing of the next public or private offering of equity or equity-linked securities of the Company in which the Company receives gross proceeds in an amount greater than $100,000, one hundred and five percent (105%) of the price of the common stock issuable in the offering. While during the first six months that the Exchange Note is outstanding, only interest payments are due to the holder, beginning in October 2019, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under the Exchange Note. The Exchange Note includes customary events of default, including non-payment of the principal or accrued interest due on the Exchange Note. Upon an event of default, all obligations under the Exchange Note will become immediately due and payable. The Holder was granted a right to participate in future financing transactions of the Company while the Exchange Note remains outstanding. As a result of the beneficial conversion feature associated with the Dominion notes, $314,228 was added to additional paid-in capital during the year ended December 31, 2019. In connection with the exchange, the Company recorded a loss on settlement of debt of $904,469 on the consolidated statement of operations for the year ended December 31, 2019. The Company was to begin making principal payments in equal installments beginning on October 1, 2019. On October 22, 2019, the Company reached an agreement with Dominion Capital to postpone the principal payments. In exchange for the extension, the Company will pay to Dominion Capital an extension fee equal to 14% of the postponed payments. As a result of this agreement, the Company added $47,731 of principal to note during the year ended December 31, 2019 and the three months ended March 31, 2020. During the year ended December 31, 2019 and the three months ended March 31, 2020, the Company paid $51,848 of principal. The Company owed $1,562,901 as of March 31, 2020 and will record accretion equal to the debt discount of $50,443 over the remaining term of the note. Convertible promissory note issued in connection with the acquisition of TNS, Inc. On January 4, 2019, as part of the acquisition described in Note 3, Acquisition of TNS, Inc., the Company issued to InterCloud a convertible promissory note in the aggregate principal amount of $620,000 (the “Note”). The interest on the outstanding principal due under the Note accrued at a rate of 6% per annum. All principal and accrued interest under the Note was due January 30, 2020, and was convertible, at any time at InterCloud’s election, into shares of common stock of the Company at a conversion price equal to the greater of 75% of the lowest volume-weighted average price during the 10 trading days immediately preceding the date of conversion and $30.00. The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $189,000 resulted in a discount to the note payable of $144,000. On January 28, 2019, the holder of the convertible promissory note entered into agreement to sell and assign a total of $620,000 of the $620,000 outstanding principal to two third parties, with $186,000 and $434,000 of principal assigned to each party (refer to the “Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020” and “Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020” sections of this note for further detail). The Company approved and is bound by the assignment and sale agreement. | |||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 100,000 | |||||||||||||||||||||||||||||||||||||
Accrued interest, percentage | 8.00% | |||||||||||||||||||||||||||||||||||||
Convertible Note Five [Member] | GS Capital Partners, LLC [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Face owed amount | $ 123,000 | |||||||||||||||||||||||||||||||||||||
Convertible debentures, net of discount | 16,778 | |||||||||||||||||||||||||||||||||||||
Convertible Note Four [Member] | GS Capital Partners, LLC [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Aggregate principal amount | 23,000 | |||||||||||||||||||||||||||||||||||||
Accrued interest | 1,026 | |||||||||||||||||||||||||||||||||||||
Loss on settlement of debt | $ 40,232 | |||||||||||||||||||||||||||||||||||||
Convertible Note Four [Member] | GS Capital Partners, LLC [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 15.00% | 8.00% | ||||||||||||||||||||||||||||||||||||
Debt Instrument, description | All principal and accrued but unpaid interest under the note is due on October 24, 2020. The note is convertible into shares of the Company’s common stock at 71% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. The conversion price has a floor of $3.00 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $20,000 resulted in an additional discount to the note payable of $20,000, for a total debt discount of $31,000. At March 31, 2020, the Company owed $123,000 pursuant to this agreement and will record accretion equal to the debt discount of $16,778 over the remaining term of the note. Convertible promissory note, SCS, LLC, 8% interest, unsecured, matured March 30, 2020 On September 1, 2019, the Company entered into and closed on a Securities Purchase Agreement with SCS, LLC, pursuant to which the Company issued to SCS, LLC an unsecured convertible promissory note in the aggregate principal amount of $51,030 in exchange for rent. The interest on the outstanding principal due under the unsecured note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the secured note and has a maturity date of March 30, 2020. The secured note is convertible into shares of the Company’s common stock at 75% of the lowest average VWAP in the 15 trading days prior to the conversion date. The conversion price has a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $29,000 resulted in a discount to the note payable of $29,000. The note matured on March 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $12,758. The interest also increased from 8% per annum to 24% per annum. At March 31, 2020, the Company owed $63,788 pursuant to this agreement. On June 19, 2020, the holder of the note began converting principal and accrued interest into shares of the Company’s common stock (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures September 17, 2020 On September 17, 2019, the Company entered into and closed on a Securities Purchase Agreement with Power Up Lending Group LTD. (“Power Up Lending”), pursuant to which the Company issued to Power Up Lending a convertible promissory note in the aggregate principal amount of $148,000 for an aggregate purchase price of $135,000. The Company received the cash on October 1, 2019. The interest on the outstanding principal due under the note accrued at a rate of 8% per annum. All principal and accrued but unpaid interest under the note was originally due on September 17, 2020. The note was convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. The conversion price had a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $159,000 resulted in an additional discount to the note payable of $135,000, for a total debt discount of $148,000. The remaining $24,000 of the initial fair value of the conversion feature was recorded as initial derivative expense on the consolidated statement of operations for the year ended December 31, 2019. At March 31, 2020, the Company owed $148,000 pursuant to this agreement and was to record accretion equal to the debt discount of $75,861 over the remaining term of the note. On April 1 2020, the holder of the note began converting principal into shares of the Company’s common stock. Between that date and June 9, 2020, the holder of the note converted the full principal amount of the note along with the accrued interest (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures January 22, 2021 On October 22, 2019, the Company entered into and closed on a Securities Purchase Agreement with Power Up Lending Group LTD. (“Power Up Lending”), pursuant to which the Company issued to Power Up Lending a convertible promissory note in the aggregate principal amount of $68,500 for an aggregate purchase price of $60,000. The interest on the outstanding principal due under the note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the note is due on January 22, 2021. The note is convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. The conversion price has a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $56,000 resulted in an additional discount to the note payable of $56,000, for a total debt discount of $64,500. At March 31, 2020, the Company owed $68,500 pursuant to this agreement and will record accretion equal to the debt discount of $40,751 over the remaining term of the note. On June 9, 2020, the holder of the note began converting principal into shares of the Company’s common stock (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures February 26, 2021 On November 27, 2019, the Company entered into and closed on a Securities Purchase Agreement with Power Up Lending Group LTD. (“Power Up Lending”), pursuant to which the Company issued to Power Up Lending a convertible promissory note in the aggregate principal amount of $58,000 for an aggregate purchase price of $50,000. The interest on the outstanding principal due under the note accrues at a rate of 8% per annum. | The secured note was convertible into shares of the Company’s common stock at 71% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. The conversion price had a floor of $3.00 per share. | ||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 123,000 | |||||||||||||||||||||||||||||||||||||
Notes payable | 20,000 | $ 28,000 | ||||||||||||||||||||||||||||||||||||
Convertible promissory note, maturity date | Aug. 2, 2020 | |||||||||||||||||||||||||||||||||||||
Convertible debentures, net of discount | 31,000 | 39,000 | $ 13,891 | |||||||||||||||||||||||||||||||||||
Fair value of conversion feature | 20,000 | $ 28,000 | ||||||||||||||||||||||||||||||||||||
Aggregate purchase price | $ 112,000 | |||||||||||||||||||||||||||||||||||||
Convertible Note Two [Member] | Silverback [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate terms, description | to the default, the new principal balance of the note is $619,362, with interest now accruing at 18% per annum. | |||||||||||||||||||||||||||||||||||||
Convertible Note Two [Member] | Dominion Capital Three [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 12.00% | |||||||||||||||||||||||||||||||||||||
Debt Instrument, description | The Company was to begin making principal payments in equal installments beginning on October 1, 2019. On October 22, 2019, the Company reached an agreement with Dominion Capital to postpone the principal payments. In exchange for the extension, the Company will pay to Dominion Capital an extension fee equal to 14% of the postponed payments. | |||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 1,571,134 | $ 51,848 | ||||||||||||||||||||||||||||||||||||
Accrued interest, percentage | 12.00% | |||||||||||||||||||||||||||||||||||||
Convertible promissory note, maturity date | Oct. 17, 2020 | |||||||||||||||||||||||||||||||||||||
Additional paid-in capital | 314,228 | |||||||||||||||||||||||||||||||||||||
Loss on settlement of debt | $ 904,469 | |||||||||||||||||||||||||||||||||||||
Convertible Note Two [Member] | Michael Roeske [Member] | TNS, Inc. [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 186,000 | $ 186,000 | ||||||||||||||||||||||||||||||||||||
Convertible Note Two [Member] | InterCloud Systems, Inc. [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 620,000 | |||||||||||||||||||||||||||||||||||||
Convertible Note Two [Member] | TNS, Inc. [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Aggregate principal amount | 0.25 | |||||||||||||||||||||||||||||||||||||
Convertible Note Two [Member] | TNS, Inc. [Member] | Derivative And Hedging [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Notes payable | $ 144,000 | |||||||||||||||||||||||||||||||||||||
Convertible Promissory Notes [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate terms, description | As a result of the assignment, the conversion price for the total of $354,375 of notes assigned was equal to the lesser 70% of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion and $2,400.00. | |||||||||||||||||||||||||||||||||||||
Fair value of the conversion feature | $ 1,174,000 | $ 348,000 | ||||||||||||||||||||||||||||||||||||
Notes payable | $ 943,299 | $ 348,000 | ||||||||||||||||||||||||||||||||||||
Convertible promissory note, maturity date | Apr. 27, 2018 | |||||||||||||||||||||||||||||||||||||
Convertible Promissory Notes [Member] | Unsecured Debt [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate terms, description | The interest on the outstanding principal due under the unsecured note accrued at a rate of 8% per annum. All principal and accrued interest under the unsecured note was due one year following the issue date of the unsecured note and was convertible into shares of common stock at a conversion price equal to 75% of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion. | |||||||||||||||||||||||||||||||||||||
Convertible Promissory Notes [Member] | Dominion Capital Two [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Accrued interest, percentage | 619362.00% | |||||||||||||||||||||||||||||||||||||
Fixed conversion price (in Dollars per share) | $ 24,000 | |||||||||||||||||||||||||||||||||||||
Convertible Note Seven [Member] | GS Capital Partners, LLC [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Notes payable | $ 40,751 | |||||||||||||||||||||||||||||||||||||
Convertible Note Seven [Member] | Power Up Lending Group LTD [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, description | The conversion price has a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $29,000 resulted in a discount to the note payable of $29,000. The note matured on March 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $12,758. The interest also increased from 8% per annum to 24% per annum. At March 31, 2020, the Company owed $63,788 pursuant to this agreement. On June 19, 2020, the holder of the note began converting principal and accrued interest into shares of the Company’s common stock (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures September 17, 2020 On September 17, 2019, the Company entered into and closed on a Securities Purchase Agreement with Power Up Lending Group LTD. (“Power Up Lending”), pursuant to which the Company issued to Power Up Lending a convertible promissory note in the aggregate principal amount of $148,000 for an aggregate purchase price of $135,000. The Company received the cash on October 1, 2019. The interest on the outstanding principal due under the note accrued at a rate of 8% per annum. All principal and accrued but unpaid interest under the note was originally due on September 17, 2020. The note was convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. The conversion price had a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $159,000 resulted in an additional discount to the note payable of $135,000, for a total debt discount of $148,000. The remaining $24,000 of the initial fair value of the conversion feature was recorded as initial derivative expense on the consolidated statement of operations for the year ended December 31, 2019. At March 31, 2020, the Company owed $148,000 pursuant to this agreement and was to record accretion equal to the debt discount of $75,861 over the remaining term of the note. On April 1 2020, the holder of the note began converting principal into shares of the Company’s common stock. Between that date and June 9, 2020, the holder of the note converted the full principal amount of the note along with the accrued interest (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures January 22, 2021 On October 22, 2019, the Company entered into and closed on a Securities Purchase Agreement with Power Up Lending Group LTD. (“Power Up Lending”), pursuant to which the Company issued to Power Up Lending a convertible promissory note in the aggregate principal amount of $68,500 for an aggregate purchase price of $60,000. The interest on the outstanding principal due under the note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the note is due on January 22, 2021. The note is convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. The conversion price has a floor of $1.50 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $56,000 resulted in an additional discount to the note payable of $56,000, for a total debt discount of $64,500. At March 31, 2020, the Company owed $68,500 pursuant to this agreement and will record accretion equal to the debt discount of $40,751 over the remaining term of the note. On June 9, 2020, the holder of the note began converting principal into shares of the Company’s common stock (refer to Note 17, Subsequent Events, for additional detail). Convertible promissory note, Power Up Lending Group LTD., 8% interest, unsecured, matures February 26, 2021 On November 27, 2019, the Company entered into and closed on a Securities Purchase Agreement with Power Up Lending Group LTD. (“Power Up Lending”), pursuant to which the Company issued to Power Up Lending a convertible promissory note in the aggregate principal amount of $58,000 for an aggregate purchase price of $50,000. The interest on the outstanding principal due under the note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the note is due on February 26, 2021. The note is convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. | |||||||||||||||||||||||||||||||||||||
Notes payable | $ 56,000 | |||||||||||||||||||||||||||||||||||||
Total debt discount | 64,500 | |||||||||||||||||||||||||||||||||||||
Convertible Note Seven [Member] | Power Up Lending Group LTD [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 75,000 | |||||||||||||||||||||||||||||||||||||
Face owed amount | $ 0.14 | |||||||||||||||||||||||||||||||||||||
Aggregate purchase price | $ 65,500 | |||||||||||||||||||||||||||||||||||||
Convertible Note Three [Member] | SCS, LLC [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Face owed amount | 63,788 | |||||||||||||||||||||||||||||||||||||
Convertible Note Three [Member] | Michael Roeske [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Accrued interest, percentage | 8.00% | 8.00% | ||||||||||||||||||||||||||||||||||||
Face owed amount | $ 145,000 | 1,562,901 | ||||||||||||||||||||||||||||||||||||
Convertible debentures, net of discount | $ 50,443 | |||||||||||||||||||||||||||||||||||||
Convertible Note Three [Member] | Michael Roeske [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 6.00% | |||||||||||||||||||||||||||||||||||||
Convertible promissory note, maturity date | Jan. 30, 2020 | |||||||||||||||||||||||||||||||||||||
Convertible Note Three [Member] | Michael Roeske [Member] | TNS, Inc. [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Accrued interest, percentage | 6.00% | 6.00% | ||||||||||||||||||||||||||||||||||||
Convertible Note Three [Member] | M2B Funding [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 6.00% | |||||||||||||||||||||||||||||||||||||
Convertible note principal amount | $ 70,000 | |||||||||||||||||||||||||||||||||||||
Convertible Note Three [Member] | Joel Raven [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 6.00% | |||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 434,000 | $ 434,000 | ||||||||||||||||||||||||||||||||||||
Accrued interest, percentage | 6.00% | 6.00% | ||||||||||||||||||||||||||||||||||||
Face owed amount | $ 455,000 | |||||||||||||||||||||||||||||||||||||
Convertible promissory note, maturity date | Jan. 30, 2020 | |||||||||||||||||||||||||||||||||||||
Accrued interest maturity date | Jan. 30, 2020 | Jan. 30, 2020 | ||||||||||||||||||||||||||||||||||||
Convertible Note Three [Member] | M2B Funding One [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Convertible note principal amount | $ 70,000 | |||||||||||||||||||||||||||||||||||||
Convertible Note Six [Member] | SCS, LLC [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 12,758 | |||||||||||||||||||||||||||||||||||||
Convertible Note Six [Member] | SCS, LLC [Member] | Maximum [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Accrued interest, percentage | 24.00% | |||||||||||||||||||||||||||||||||||||
Convertible Note Six [Member] | SCS, LLC [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, description | The interest on the outstanding principal due under the unsecured note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the secured note and has a maturity date of March 30, 2020. The secured note is convertible into shares of the Company’s common stock at 75% of the lowest average VWAP in the 15 trading days prior to the conversion date. The conversion price has a floor of $1.50 per share. | |||||||||||||||||||||||||||||||||||||
Notes payable | $ 29,000 | |||||||||||||||||||||||||||||||||||||
Convertible Note Six [Member] | Power Up Lending Group LTD [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 8.00% | |||||||||||||||||||||||||||||||||||||
Convertible debentures, net of discount | $ 75,861 | |||||||||||||||||||||||||||||||||||||
Convertible Note Six [Member] | Power Up Lending Group LTD [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 8.00% | |||||||||||||||||||||||||||||||||||||
Debt Instrument, description | The interest on the outstanding principal due under the note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the note is due on February 26, 2021. The note is convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. | The interest on the outstanding principal due under the note accrued at a rate of 8% per annum. All principal and accrued but unpaid interest under the note was originally due on September 17, 2020. The note was convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 15 trading days prior to and including the conversion date. The conversion price had a floor of $1.50 per share. | ||||||||||||||||||||||||||||||||||||
Aggregate principal amount | 58,000 | $ 148,000 | ||||||||||||||||||||||||||||||||||||
Notes payable | $ 43,000 | |||||||||||||||||||||||||||||||||||||
Face owed amount | $ 58,000 | |||||||||||||||||||||||||||||||||||||
Convertible debentures, net of discount | 51,000 | $ 148,000 | 35,417 | |||||||||||||||||||||||||||||||||||
Fair value of conversion feature | $ 43,000 | |||||||||||||||||||||||||||||||||||||
Aggregate purchase price | $ 50,000 | |||||||||||||||||||||||||||||||||||||
Convertible Note Six [Member] | Crown Bridge Partners, LLC [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, description | The interest on the outstanding principal due under the first tranche of the note accrues at a rate of 10% per annum. All principal and accrued but unpaid interest under the first tranche of the note is due on November 21, 2020. The first tranche of the note is convertible into shares of the Company’s common stock at 60% of the average of the three lowest VWAPs in the 20 trading days prior to and including the conversion date. | |||||||||||||||||||||||||||||||||||||
Convertible Note Six [Member] | Crown Bridge Partners, LLC [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, description | The interest on the outstanding principal due under the first tranche of the note accrues at a rate of 10% per annum. All principal and accrued but unpaid interest under the first tranche of the note is due on November 21, 2020. The first tranche of the note is convertible into shares of the Company’s common stock at 60% of the average of the three lowest VWAPs in the 20 trading days prior to and including the conversion date. | |||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 225,000 | $ 51,030 | ||||||||||||||||||||||||||||||||||||
Notes payable | $ 65,500 | |||||||||||||||||||||||||||||||||||||
Accrued interest, percentage | 10.00% | |||||||||||||||||||||||||||||||||||||
Convertible debentures, net of discount | $ 75,000 | |||||||||||||||||||||||||||||||||||||
Fair value of conversion feature | 138,000 | $ 92,638 | ||||||||||||||||||||||||||||||||||||
Aggregate purchase price | $ 202,500 | |||||||||||||||||||||||||||||||||||||
Shares issued (in Shares) | 2,500 | |||||||||||||||||||||||||||||||||||||
Exercise price (in Dollars per share) | $ 30 | |||||||||||||||||||||||||||||||||||||
Fair value of warrant feature | $ 20,138 | |||||||||||||||||||||||||||||||||||||
Convertible Note Six [Member] | CCAG Investments, LLC [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, description | The interest on the outstanding principal due under the note accrued at a rate of 20% per annum. All principal and accrued but unpaid under the secured note was originally due on June 30, 2020. The note was convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. | |||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 175,000 | |||||||||||||||||||||||||||||||||||||
Fair value of the warrants | 64,000 | |||||||||||||||||||||||||||||||||||||
Notes payable | 106,000 | |||||||||||||||||||||||||||||||||||||
Convertible promissory note, maturity date | Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||
Convertible debentures, net of discount | 175,000 | |||||||||||||||||||||||||||||||||||||
Fair value of conversion feature | 42,000 | |||||||||||||||||||||||||||||||||||||
Aggregate purchase price | 157,500 | |||||||||||||||||||||||||||||||||||||
original issue discount | 17,500 | |||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 51,500 | |||||||||||||||||||||||||||||||||||||
Warrant issued, description | The Company also issued a warrant equal to 50% of the face amount of the note with a term of three years to purchase 9,723 shares of common stock at an initial exercise price of $9.00 per share. | |||||||||||||||||||||||||||||||||||||
Convertible Note Six [Member] | CCAG Investments, LLC [Member] | Convertible Note Six [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 20.00% | |||||||||||||||||||||||||||||||||||||
Convertible Note Six [Member] | FJ Vulis and Associates LLC [Member] | Securities Purchase Agreement One [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 20.00% | |||||||||||||||||||||||||||||||||||||
Debt Instrument, description | The interest on the outstanding principal due under the note accrued at a rate of 20% per annum. All principal and accrued but unpaid under the secured note was originally due on June 30, 2020. The note was convertible into shares of the Company’s common stock at 70% of the average of the three lowest VWAPs in the 12 trading days prior to and including the conversion date. | |||||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 175,000 | |||||||||||||||||||||||||||||||||||||
Fair value of the warrants | 64,000 | |||||||||||||||||||||||||||||||||||||
Notes payable | $ 106,000 | |||||||||||||||||||||||||||||||||||||
Convertible promissory note, maturity date | Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||
Convertible debentures, net of discount | $ 175,000 | |||||||||||||||||||||||||||||||||||||
Fair value of conversion feature | 42,000 | |||||||||||||||||||||||||||||||||||||
Aggregate purchase price | 157,500 | |||||||||||||||||||||||||||||||||||||
original issue discount | 17,500 | |||||||||||||||||||||||||||||||||||||
Issuance of common stock | $ 51,500 | |||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, description | the Company made the fourth amendment to the Certificate of Designation of its Series A preferred stock, which lowered the fixed conversion price to $0.20 per share and the conversion price floor to $0.01 per share. | |||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | GS Capital Partners, LLC [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Convertible note principal amount | $ 5,742 | |||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Power Up Lending Group LTD [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Convertible note principal amount | $ 2,540 | $ 240 | $ 5,520 | |||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Convertible Note Four [Member] | GS Capital Partners, LLC [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Aggregate principal amount | 100,000 | |||||||||||||||||||||||||||||||||||||
Accrued interest | $ 5,742 | |||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Convertible Note Six [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible Debentures (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||
Principal repayment, percentage | 120.00% | |||||||||||||||||||||||||||||||||||||
[1] | The Company has estimated the fair value of these derivatives using the Monte-Carlo model and/or a Binomial Model. |
Convertible Debentures (Detai_2
Convertible Debentures (Details) - Schedule of convertible promissory note - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | $ 3,242,205 | $ 2,837,679 |
Less: Long-term portion of convertible debentures, net of debt discount | (28,324) | |
Convertible debentures, current portion, net of debt discount | 3,242,205 | 2,809,355 |
Convertible Note [Member] | Barn [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | 594,362 | 594,362 |
Convertible Note [Member] | Dominion Capital Three [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | 1,512,458 | 1,461,265 |
Convertible Note [Member] | Michael Roeske [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | 145,000 | 112,488 |
Convertible Note [Member] | Joel Raven [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | 455,000 | 355,342 |
Convertible Note [Member] | GS Capital Partners LLC [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | 86,109 | 98,181 |
Convertible Note [Member] | SCS, LLC [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | 63,788 | 38,025 |
Convertible Note [Member] | Power Up Lending Group LTD [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | 72,139 | 34,326 |
Convertible Note [Member] | Power Up Lending Group LTD One [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | 27,750 | 15,449 |
Convertible Note [Member] | Power Up Lending Group LTD Two [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | 22,583 | 12,875 |
Convertible Note [Member] | GS Capital Partners, LLC [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | 106,222 | 99,014 |
Convertible Note [Member] | Crown Bridge Partners [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | 28,102 | $ 16,352 |
Convertible Note [Member] | CCAG Investments, LLC [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | 64,346 | |
Convertible Note [Member] | FJ Vulis and Associates LLC [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | ||
Convertible promissory note | $ 64,346 |
Convertible Debentures (Detai_3
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) - Convertible Note [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Barn [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 18.00% | 18.00% |
Debt instrument maturity date | Jun. 1, 2019 | Jun. 1, 2019 |
Dominion Capital Three [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 12.00% | 12.00% |
Debt instrument maturity date | Oct. 17, 2020 | Oct. 17, 2020 |
Convertible debentures, net of discount (in Dollars) | $ 50,443 | $ 105,752 |
Michael Roeske [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 24.00% | 24.00% |
Convertible debentures, net of discount (in Dollars) | $ 0 | $ 3,512 |
Joel Raven [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 24.00% | 24.00% |
Convertible debentures, net of discount (in Dollars) | $ 0 | $ 8,658 |
GS Capital Partners LLC [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 8.00% | 8.00% |
Debt instrument maturity date | Aug. 2, 2020 | Aug. 2, 2020 |
Convertible debentures, net of discount (in Dollars) | $ 13,891 | $ 24,819 |
SCS, LLC [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 24.00% | 24.00% |
Debt instrument maturity date | Mar. 30, 2020 | Mar. 30, 2020 |
Convertible debentures, net of discount (in Dollars) | $ 0 | $ 13,005 |
Power Up Lending Group LTD [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 8.00% | 8.00% |
Debt instrument maturity date | Sep. 17, 2020 | Sep. 17, 2020 |
Convertible debentures, net of discount (in Dollars) | $ 75,861 | $ 113,674 |
Power Up Lending Group LTD One [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 8.00% | 8.00% |
Debt instrument maturity date | Jan. 22, 2021 | Jan. 22, 2021 |
Convertible debentures, net of discount (in Dollars) | $ 40,750 | $ 53,051 |
Power Up Lending Group LTD Two [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 8.00% | 8.00% |
Debt instrument maturity date | Feb. 26, 2021 | Feb. 26, 2021 |
Convertible debentures, net of discount (in Dollars) | $ 35,417 | $ 45,125 |
GS Capital Partners, LLC [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 18.00% | 18.00% |
Debt instrument maturity date | Oct. 24, 2020 | Oct. 24, 2020 |
Convertible debentures, net of discount (in Dollars) | $ 16,778 | $ 23,986 |
Crown Bridge Partners [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 10.00% | 10.00% |
Debt instrument maturity date | Nov. 21, 2020 | Nov. 21, 2020 |
Convertible debentures, net of discount (in Dollars) | $ 46,898 | $ 58,648 |
CCAG Investments, LLC [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 8.00% | 8.00% |
Debt instrument maturity date | Jun. 30, 2020 | Jun. 30, 2020 |
Convertible debentures, net of discount (in Dollars) | $ 110,654 | |
FJ Vulis and Associates LLC [Member] | ||
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | ||
Debt instrument, interest rate | 8.00% | 8.00% |
Debt instrument maturity date | Jun. 30, 2020 | Jun. 30, 2020 |
Convertible debentures, net of discount (in Dollars) | $ 110,654 |
Factor Financing (Details)
Factor Financing (Details) - USD ($) | Feb. 11, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Factor Financing (Details) [Line Items] | ||||
Amount from bay view funding | $ 3,024,532 | |||
Other Loans Payable, Current | $ 5,000,000 | |||
Proceeds from factoring financing | $ 4,685,390 | |||
Repayment of factor financing | $ 164,468 | |||
Factor financing owned | 2,844,381 | |||
Adex [Member] | ||||
Factor Financing (Details) [Line Items] | ||||
Factor agreement, description | the Company’s ADEX subsidiary may borrow up to the lesser of $5,000,000 or an amount equal to the sum of all undisputed purchased receivables multiplied by the advance percentage, less any funds in reserve. ADEX will pay to Bay View Funding a factoring fee upon purchase of receivables by Bay View Funding equal to 0.75% of the gross face value of the purchased receivable for the first 30 day period from the date said purchased receivable is first purchased by Bay View Funding, and a factoring fee of 0.35% per 15 days thereafter until the date said purchased receivable is paid in full or otherwise repurchased by ADEX or otherwise written off by Bay View Funding within the write off period. ADEX will also pay a finance fee to Bay View Funding on the outstanding advances under the agreement at a floating rate per annum equal to the Prime Rate plus 3%. The finance rate will increase or decrease monthly, on the first day of each month, by the amount of any increase or decrease in the Prime Rate, but at no time will the finance fee be less than 7.75%. | |||
Repayment of factor financing | $ 57,600 | |||
Factoring Agreement [Member] | ||||
Factor Financing (Details) [Line Items] | ||||
Proceeds from factoring financing | 4,685,390 | |||
Repayment of factor financing | 1,841,858 | |||
Factor financing owned | $ 2,844,381 |
Derivative Liabilities (Details
Derivative Liabilities (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liabilities description | As of March 31, 2020, the derivative liability balance of $2,063,062 was comprised of $1,225,000 of derivatives related to the Company’s convertible debentures, and $838,062 of derivatives related to the Company’s share purchase warrants and stock options. | As of December 31, 2019, the derivative liability balance of $992,733 was comprised of $801,000 of derivatives related to the Company’s convertible debentures, and $191,732 of derivatives related to the Company’s share purchase warrants and stock options. |
Derivative Liabilities (Detai_2
Derivative Liabilities (Details) - Schedule of changes in the fair value of the Company's Level 3 financial liabilities - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Schedule of changes in the fair value of the Company's Level 3 financial liabilities [Abstract] | ||
Balance at the beginning of the period | $ 992,733 | $ 3,166,886 |
Change in fair value of embedded conversion option | 813,630 | (1,843,935) |
Fair value of debt derivatives at issuance | 84,000 | |
Fair value of warrant derivatives at issuance | 128,000 | |
Fair value of option derivatives at issuance | 44,700 | |
Conversion of derivative liability | (1,281,888) | |
Original discount limited to proceeds of notes | 376,500 | |
Repayment of convertible note | (164,468) | |
Derivative issued as part of acquisition | 189,000 | |
Fair value of derivative liabilities in excess of notes proceeds received | 116,638 | |
Addition to derivative due to default penalty | 466,000 | |
Impact of note extinguishment | (32,000) | |
Balance at the end of the period | $ 2,063,063 | $ 992,733 |
Derivative Liabilities (Detai_3
Derivative Liabilities (Details) - Schedule of assumptions used in the calculations | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Expected volatility | 193.00% | 230.00% |
Risk-free interest rate | 0.04% | 1.55% |
Expected life (in years) | 29 days | 3 months |
Maximum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Expected volatility | 361.00% | 304.00% |
Risk-free interest rate | 1.75% | 1.75% |
Expected life (in years) | 2 years 310 days | 1 year 58 days |
Common Stock (Details)
Common Stock (Details) - Common Stock [Member] - USD ($) | Mar. 13, 2020 | Feb. 12, 2020 | Feb. 11, 2020 | Feb. 07, 2020 | Jan. 07, 2020 | Feb. 18, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Nov. 15, 2017 |
Common Stock (Details) [Line Items] | |||||||||
Treasury stock common shares | 2,071 | ||||||||
Treasury stock common value (in Dollars) | $ 277,436 | ||||||||
Common stock issued for services | 9,565 | ||||||||
Minimum [Member] | |||||||||
Common Stock (Details) [Line Items] | |||||||||
Common stock, shares authorized | 275,000,000 | ||||||||
Common stock par value (in Dollars per share) | $ 0.00001 | ||||||||
Maximum [Member] | |||||||||
Common Stock (Details) [Line Items] | |||||||||
Common stock, shares authorized | 750,000,000 | ||||||||
Common stock par value (in Dollars per share) | $ 0.00001 | ||||||||
CCAG Investments, LLC [Member] | |||||||||
Common Stock (Details) [Line Items] | |||||||||
Common stock, shares issued | 9,755 | ||||||||
FJ Vulis and Associates, LLC [Member] | |||||||||
Common Stock (Details) [Line Items] | |||||||||
Common stock, shares issued | 9,755 | ||||||||
GS Capital Partners, LLC Convertible Debentures [Member] | |||||||||
Common Stock (Details) [Line Items] | |||||||||
Common stock, shares issued | 11,212 | 1,647 | |||||||
Conversion of principal amount (in Dollars) | $ 15,000 | $ 8,000 | |||||||
Accrued interest (in Dollars) | $ 703 | $ 323 | |||||||
WaveTech GmbH Post-Closing Notes [Member] | |||||||||
Common Stock (Details) [Line Items] | |||||||||
Common stock, shares issued | 1,082,731 | ||||||||
Conversion of principal amount (in Dollars) | $ 8,507,557 | ||||||||
Series A Preferred Stock [Member] | |||||||||
Common Stock (Details) [Line Items] | |||||||||
Common stock issued for services | 2,778 | 1,112 | |||||||
Conversion of shares | 25,000 | 10,000 | |||||||
Stated value per share (in Dollars per share) | $ 1 | $ 1 |
Preferred Stock (Details)
Preferred Stock (Details) - USD ($) | Apr. 08, 2020 | Nov. 14, 2019 | Jun. 18, 2020 | Aug. 16, 2019 | Oct. 29, 2018 | Apr. 16, 2018 | Dec. 31, 2019 | Mar. 31, 2020 | Nov. 15, 2017 |
Preferred Stock (Details) [Line Items] | |||||||||
Conversion rights, description | the Company made the third amendment to the Certificate of Designation of its Series A preferred stock, which lowered the fixed conversion price and the conversion price floor to $3.00 per share (refer to Note 17, Subsequent Events, for additional detail). | the Company made the fourth amendment to the Certificate of Designation of its Series A preferred stock, which lowered the fixed conversion price to $0.20 per share and the conversion price floor to $0.01 per share (refer to Note 17, Subsequent Events, for additional detail). | |||||||
Stated value per share | $ 3,500 | ||||||||
Series B preferred stock voting, description | The holders of shares of Series B preferred stock shall be voted together with the shares of common stock such that the aggregate voting power of the Series B preferred stock is equal to 51% of the total voting power of the Company. | ||||||||
Common stock, par value | $ 0.00001 | $ 0.00001 | |||||||
Series A Preferred Stock [Member] | |||||||||
Preferred Stock (Details) [Line Items] | |||||||||
Preferred stock, shares authorized (in Shares) | 8,000,000 | 8,000,000 | 20,000,000 | ||||||
Preferred stock shares designated (in Shares) | 8,000,000 | ||||||||
Preferred stock conversion, description | the Company made the first amendment to the Certificate of Designation of its Series A convertible preferred stock. This amendment updated the conversion price to be equal to the greater of 75% of the lowest VWAP during the ten trading day period immediately preceding the date a conversion notice is delivered or $120.00, subject to adjustment for any subdivision or combination of the Company’s outstanding shares of common stock. | ||||||||
Preferred stock deemed dividend (in Dollars) | $ 488,072 | ||||||||
Conversion rights, description | The number of shares of common stock into which each share of the Series A preferred stock shares may be converted shall be determined by dividing the sum of the stated value of the Series A preferred stock shares ($1.00 per share) being converted and any accrued and unpaid dividends by the conversion price in effect at the time of the conversion. The Series A preferred stock shares may be converted at an initial conversion price of the lower of 80% of the lowest VWAP during the five trading day period immediately preceding the date a conversion notice is delivered or $15.00, subject to adjustment for any subdivision or combination of the Company’s outstanding shares of common stock. The conversion price has a floor of $9.00 per share. | ||||||||
Preferred stock, stated value | $ 0.00001 | $ 0.00001 | |||||||
Series B Preferred Stock [Member] | |||||||||
Preferred Stock (Details) [Line Items] | |||||||||
Preferred stock, shares authorized (in Shares) | 1,000 | 1,000 | |||||||
Preferred stock shares designated (in Shares) | 1,000 | ||||||||
Stated value per share | $ 3,500 | $ 3,500 | |||||||
Preferred stock, stated value | $ 3,500 | 3,500 | |||||||
Series C Preferred Stock [Member] | |||||||||
Preferred Stock (Details) [Line Items] | |||||||||
Preferred stock shares designated (in Shares) | 9,000,000 | ||||||||
Conversion rights, description | (i) $90,000,000 (the “Aggregate Value”)/Strike Price (as defined below), or (ii) the Aggregate Value/$9.75 (as adjusted for any reverse stock split or similar adjustment that may occur prior to the Series C Conversion Date). Provided, however, if a Triggering Event (as defined below) occurs, the Aggregate Value shall be reduced by the amount of any Losses (as defined below). | ||||||||
Stated value per share | $ 0.00001 | $ 0.00001 | |||||||
Preferred stock, stated value | $ 0.00001 |
Share Purchase Warrants and S_3
Share Purchase Warrants and Stock Options (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Share Purchase Warrants [Abstract] | ||
Fair Value Adjustment of Warrants | $ 838,062 | |
Proceeds from Stock Options Exercised | $ 191,732 | |
Percentage of warrant convertible shares | 4.00% | |
Shares outstanding | 1,312,634 | |
Share purchase warrants | 1 year 219 days | 1 year 109 days |
Share Purchase Warrants and S_4
Share Purchase Warrants and Stock Options (Details) - Schedule of share purchase warrants | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Schedule of share purchase warrants [Abstract] | |
Number of warrants, Beginning Balance | shares | 14,075 |
Weighted average exercise price, Beginning Balance | $ / shares | $ 331.46 |
Number of warrants, Issued | shares | 64,134 |
Weighted average exercise price, Issued | $ / shares | $ 253.57 |
Number of warrants, Expired | shares | |
Weighted average exercise price, Expired | $ / shares | |
Number of warrants, Ending Balance | shares | 78,209 |
Weighted average exercise price, Ending Balance | $ / shares | $ 267.59 |
Share Purchase Warrants and S_5
Share Purchase Warrants and Stock Options (Details) - Schedule of share purchase warrants outstanding | 3 Months Ended | |
Mar. 31, 2020shares | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants | 78,209 | |
Warrant Expiry Date [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants | 459 | |
Exercise Price | 1,530 | |
Issuance Date | 28-04-2017 | |
Expiry date | 28-04-2020 | |
Warrant Expiry Date One [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants | 834 | |
Exercise Price | 300 | |
Issuance Date | 27-06-2017 | |
Expiry date | 27-06-2020 | |
Warrant Expiry Date Two [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants | 52,506 | [1] |
Exercise Price | 360 | |
Issuance Date | 14-02-2018 | |
Expiry date | 13-02-2021 | |
Warrant Expiry Date Three [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants | 417 | |
Exercise Price | 480 | |
Issuance Date | 21-02-2018 | |
Expiry date | 21-02-2021 | |
Warrant Expiry Date Four [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants | 1,667 | |
Exercise Price | 300 | |
Issuance Date | 17-05-2018 | |
Expiry date | 17-05-2020 | |
Warrant Expiry Date Five [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants | 380 | |
Exercise Price | 324 | |
Issuance Date | 10-10-2018 | |
Expiry date | 10-10-2021 | |
Warrant Expiry Date Six [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants | 2,500 | |
Exercise Price | 30 | |
Issuance Date | 21-11-2019 | |
Expiry date | 21-11-2022 | |
Warrant Expiry Date Seven [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants | 9,723 | |
Exercise Price | 9 | |
Issuance Date | 07-02-2020 | |
Expiry date | 07-02-2023 | |
Warrant Expiry Date Eight [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants | 9,723 | |
Exercise Price | 9 | |
Issuance Date | 07-02-2020 | |
Expiry date | 07-02-2023 | |
[1] | This warrant is convertible into 4% of the number of common shares of the Company outstanding. At March 31, 2020, it is 4% of the 1,312,634 shares outstanding as of that date. |
Share Purchase Warrants and S_6
Share Purchase Warrants and Stock Options (Details) - Schedule of activity of stock options | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Schedule of activity of stock options [Abstract] | |
Number of stock options, Beginning Balance | shares | 5,000 |
Weighted average exercise price, Beginning Balance | $ / shares | $ 9 |
Number of stock options, Issued | shares | |
Weighted average exercise price, Issued | $ / shares | |
Number of stock options, Expired | shares | |
Weighted average exercise price, Expired | $ / shares | |
Number of stock options, Ending Balance | shares | 5,000 |
Weighted average exercise price, Ending Balance | $ / shares | $ 9 |
Share Purchase Warrants and S_7
Share Purchase Warrants and Stock Options (Details) - Schedule of stock options outstanding | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Schedule of stock options outstanding [Abstract] | |
Number of stock options | shares | 5,000 |
Exercise price | $ / shares | $ 9 |
Issuance Date | Nov. 25, 2019 |
Expiry date | Nov. 25, 2021 |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | |
Disclosure Text Block [Abstract] | |||
Net lease liabilities | $ 269,341 | ||
Non-cash operating lease liabilities | $ 316,600 | ||
Operating lease expense | $ 52,308 | 48,175 | |
Short-term lease costs | 50,073 | 78,035 | |
Measurement of operating lease liabilities | $ 51,799 | $ 47,309 | |
Lease, description | the Company reduced its operating lease liabilities by $31,662 and $36,150 for cash paid. | ||
Weighted average discount rate | 58.00% | ||
Weighted average remaining term | 2 years 9 months |
Leases (Details) - Schedule of
Leases (Details) - Schedule of operating leases related to assets and liabilities - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of operating leases related to assets and liabilities [Abstract] | ||
Operating lease assets | $ 136,211 | $ 168,384 |
Current operating lease liabilities | 141,688 | 173,351 |
Total operating lease liabilities | $ 141,688 | $ 173,351 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of weighted-average discount rate | Dec. 31, 2020USD ($) |
Schedule of weighted-average discount rate [Abstract] | |
2020 | $ 70,203 |
2021 | 95,914 |
2022 | 86,681 |
2023 | 21,330 |
Total lease payments | 274,128 |
Less: imputed interest | (132,440) |
Total | $ 141,688 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Nov. 14, 2019 | Jul. 15, 2019 | May 06, 2019 | Oct. 10, 2018 | Aug. 29, 2019 | Jul. 03, 2018 | Jun. 25, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Feb. 04, 2019 |
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Lease term, description | The Company leases certain of its properties under leases that expire on various dates through 2023. Some of these agreements include escalation clauses and provide for renewal options ranging from one to five years. Leases with an initial term of 12 months or less and immaterial leases are not recorded on the balance sheet (refer to Note 14, Leases, for amounts expensed during the three months ended March 31, 2020 and 2019). | The Company leases certain of its properties under leases that expire on various dates through 2023. Some of these agreements include escalation clauses and provide for renewal options ranging from one to five years. Leases with an initial term of 12 months or less and immaterial leases are not recorded on the balance sheet (refer to Note 14, Leases, for amounts expensed during the three months ended March 31, 2020 and 2019). | |||||||||
Purchase of common stock | $ 8,507,557 | ||||||||||
Cash receivable | $ 3,000,000 | ||||||||||
Purchase Agreement, Description | The share purchase agreement also contains certain termination rights for both the Company and WaveTech GmbH, including that the Company or WaveTech GmbH may terminate the share purchase agreement if WaveTech GmbH has not obtained executed assignment agreements from its shareholders holding an aggregate of (i) fifty one percent (51%) of the issued and outstanding shares of WaveTech GmbH by the date that is ninety (90) days following the date of the share purchase agreement and (ii) ninety percent (90%) of the issued and outstanding shares of WaveTech GmbH by March 31, 2020. | ||||||||||
Acquiring percentage | 60.00% | ||||||||||
Percentage of aggregate shares issued and outstanding | 3.00% | ||||||||||
Exchange loss | $ (10,022) | ||||||||||
Cash from WaveTech GmbH | $ 299,972 | $ 1,325,895 | |||||||||
On May 6, 2019, the remaining principal balance of $1,452,299 was converted into shares of the Company’s common stock through an automatic forced conversion. | In addition, the Company issued a warrant (the “Warrant”) to the Lender to purchase an amount of shares of the Company’s common stock equal to $150,000 divided by the Warrant Price (as defined in the Warrant) at a price per share equal to 125% of the prior day’s closing price. | On February 21, 2018, the Company issued a convertible note with a principal amount of $500,000 and a warrant with a term of three years to purchase up to 417 shares of common stock of the Company at an exercise price of $480.00 per share to Barn 11. The exercise price of the warrant was to reduce to 85% of the closing price of the Company’s common stock if the closing price of the Company’s common stock was less than $480.00 on July 31, 2018. The note was due on January 15, 2019, and in February 2019, the maturity date was extended to June 1, 2019, and bears interest at 6% per annum. The note is convertible into common shares of the Company at a conversion price equal to the lower of 80% of the lowest volume-weighted average price during the 5 trading days immediately preceding the date of conversion and $300.00 (the “Floor”), unless the note is in default, at which time the Floor terminates. The embedded conversion option and warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $571,079 and the warrant of $158,772 resulted in a discount to the note payable of $500,000 and an initial derivative expense of $229,851. On June 1, 2019, the Company was in default on the note. As a result of the default, a 15% premium was added to the balance owed, including all accrued interest. Subsequent to the default, the new principal balance of the note is $619,362, with interest now accruing at 18% per annum. Additionally, $466,000 was added to the derivative liability balance in connection with the default. During the year ended December 31, 2019, the Company paid $25,000 of principal. The Company owed $594,362 as of March 31, 2020. Convertible promissory note, Dominion Capital, 12% interest, unsecured, matures October 17, 2020 On April 17, 2019, Dominion Capital exchanged two notes into a new note (the “Exchange Note”) with a principal amount of $1,571,134. Interest accrues on the new note at 12% per annum. All principal and accrued interest under the Exchange Note is due on October 17, 2020 and is convertible into shares of the Company’s common stock. The conversion price in effect on the date such conversion is effected shall be equal to (i) initially, $30.00 or (ii) on or after the date of the closing of the next public or private offering of equity or equity-linked securities of the Company in which the Company receives gross proceeds in an amount greater than $100,000, one hundred and five percent (105%) of the price of the common stock issuable in the offering. While during the first six months that the Exchange Note is outstanding, only interest payments are due to the holder, beginning in October 2019, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under the Exchange Note. The Exchange Note includes customary events of default, including non-payment of the principal or accrued interest due on the Exchange Note. Upon an event of default, all obligations under the Exchange Note will become immediately due and payable. The Holder was granted a right to participate in future financing transactions of the Company while the Exchange Note remains outstanding. As a result of the beneficial conversion feature associated with the Dominion notes, $314,228 was added to additional paid-in capital during the year ended December 31, 2019. In connection with the exchange, the Company recorded a loss on settlement of debt of $904,469 on the consolidated statement of operations for the year ended December 31, 2019. The Company was to begin making principal payments in equal installments beginning on October 1, 2019. On October 22, 2019, the Company reached an agreement with Dominion Capital to postpone the principal payments. In exchange for the extension, the Company will pay to Dominion Capital an extension fee equal to 14% of the postponed payments. As a result of this agreement, the Company added $47,731 of principal to note during the year ended December 31, 2019 and the three months ended March 31, 2020. During the year ended December 31, 2019 and the three months ended March 31, 2020, the Company paid $51,848 of principal. The Company owed $1,562,901 as of March 31, 2020 and will record accretion equal to the debt discount of $50,443 over the remaining term of the note. Convertible promissory note issued in connection with the acquisition of TNS, Inc. On January 4, 2019, as part of the acquisition described in Note 3, Acquisition of TNS, Inc., the Company issued to InterCloud a convertible promissory note in the aggregate principal amount of $620,000 (the “Note”). The interest on the outstanding principal due under the Note accrued at a rate of 6% per annum. All principal and accrued interest under the Note was due January 30, 2020, and was convertible, at any time at InterCloud’s election, into shares of common stock of the Company at a conversion price equal to the greater of 75% of the lowest volume-weighted average price during the 10 trading days immediately preceding the date of conversion and $30.00. The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $189,000 resulted in a discount to the note payable of $144,000. On January 28, 2019, the holder of the convertible promissory note entered into agreement to sell and assign a total of $620,000 of the $620,000 outstanding principal to two third parties, with $186,000 and $434,000 of principal assigned to each party (refer to the “Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020” and “Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020” sections of this note for further detail). The Company approved and is bound by the assignment and sale agreement. Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020 On January 28, 2019, InterCloud assigned $186,000 of the note issued in connection with the acquisition of TNS to Michael Roeske. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Roeske converted $70,000 of principal of the note into shares of the Company’s common stock. The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $29,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $145,000 pursuant to this agreement. Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020 On January 28, 2019, InterCloud assigned $434,000 of the note issued in connection with the acquisition of TNS to Joel Raven. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Raven converted $70,000 of principal of the note into shares of the Company’s common stock The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $91,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $455,000 pursuant to this agreement. Convertible promissory note, GS Capital Partners, LLC, 8% interest, secured, matures August 2, 2020 On August 2, 2019, the Company entered into and closed on a Securities Purchase Agreement with GS Capital Partners, LLC, pursuant to which the Company issued to GS Capital Partners, LLC a senior secured convertible promissory note in the aggregate principal amount of $123,000 for an aggregate purchase price of $112,000. The interest on the outstanding principal due under the secured note accrued at a rate of 8% per annum. | |||||||||
Description of equity purchase agreement | the equity purchase agreement, the Company shall have the discretion to deliver put notices to Oasis Capital and Oasis Capital will be obligated to purchase shares of the Company’s common stock, par value $0.00001 per share based on the investment amount specified in each put notice. The maximum amount that the Company shall be entitled to put to Oasis Capital in each put notice shall not exceed the lesser of $250,000 or two hundred percent (200%) of the average daily trading volume of the Company’s common stock during the ten (10) trading days preceding the put. Pursuant to the equity purchase agreement, Oasis Capital and its affiliates will not be permitted to purchase and the Company may not put shares of the Company’s common stock to Oasis Capital that would result in Oasis Capital’s beneficial ownership of the Company’s outstanding common stock exceeding 9.99%. The price of each put share shall be equal to eighty five percent (85%) of the market price (as defined in the equity purchase agreement). Puts may be delivered by the Company to Oasis Capital until the earlier of (i) the date on which Oasis Capital has purchased an aggregate of $2,500,000 worth of common stock under the terms of the equity purchase agreement, (ii) August 29, 2022, or (iii) written notice of termination delivered by the Company to Oasis Capital, subject to certain equity conditions set forth in the equity purchase agreement. | ||||||||||
WaveTech GmbH [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Cash from WaveTech GmbH | 3,000,000 | ||||||||||
Due from related party | $ 3,299,972 | ||||||||||
the Company obtained additional executed assignment agreements from shareholders holding an aggregate of 30% of the issued and outstanding shares of WaveTech GmbH (refer to Note 17, Subsequent Events, for additional detail). As a result, as of the date of this report, the Company has obtained executed assignment agreements from shareholders holding an aggregate of 90% of the issued and outstanding shares of WaveTech GmbH. | |||||||||||
WaveTech GmbH [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Cash received | $ 2,989,978 | ||||||||||
Oasis Capital Agreed [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Purchase of common stock | $ 2,500,000 |
Segment Disclosures (Details)
Segment Disclosures (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 2 | 2 |
Segment reporting, description | The Company operates the SGS reporting segment in one geographical area (the United States) and the AWS/ADEX/TNS operating segment in two geographical areas (the United States and Puerto Rico). | |
Number of geographical area | 1 |
Segment Disclosures (Details) -
Segment Disclosures (Details) - Schedule of information by operating segment - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 7,130,480 | $ 11,335,732 | $ 11,335,732 |
Operating (loss) income | (1,661,552) | 14,701 | 14,701 |
Interest expense | 416,147 | 471,412 | 471,412 |
Depreciation and amortization | 97,173 | $ 93,952 | 93,952 |
Total assets | 16,308,675 | 12,168,818 | |
Spectrum Global [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | |||
Operating (loss) income | (745,562) | (954,965) | |
Interest expense | 341,226 | 399,555 | |
Depreciation and amortization | |||
Total assets | 5,194,959 | 11,783 | |
TNS [Member] | AWS [Member] | Adex [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 7,130,480 | 11,335,732 | |
Operating (loss) income | (915,990) | 969,666 | |
Interest expense | 74,921 | 71,857 | |
Depreciation and amortization | 97,173 | 93,952 | |
Total assets | $ 11,113,716 | $ 12,157,035 |
Segment Disclosures (Details)_2
Segment Disclosures (Details) - Schedule of geographic information - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, Consolidated Total | $ 7,130,480 | $ 11,335,732 | $ 11,335,732 |
Long-Lived Assets, Consolidated Total | 5,812,035 | 5,870,938 | |
Puerto Rico [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, Consolidated Total | 170,512 | 310,478 | |
Long-Lived Assets, Consolidated Total | 9,268 | 9,698 | |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, Consolidated Total | 6,959,968 | $ 11,025,254 | |
Long-Lived Assets, Consolidated Total | $ 5,802,767 | $ 5,861,240 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jun. 12, 2020 | Jun. 09, 2020 | May 20, 2020 | May 13, 2020 | May 12, 2020 | May 06, 2020 | Apr. 16, 2020 | Apr. 14, 2020 | Apr. 13, 2020 | Apr. 09, 2020 | Apr. 08, 2020 | Apr. 02, 2020 | Apr. 01, 2020 | May 06, 2019 | Oct. 10, 2018 | Jun. 26, 2020 | Jun. 25, 2020 | Jun. 22, 2020 | Jun. 19, 2020 | Jun. 18, 2020 | Jun. 16, 2020 | May 08, 2020 | Apr. 30, 2020 | Apr. 29, 2020 | Apr. 27, 2020 | Apr. 21, 2020 | Apr. 20, 2020 | Jul. 03, 2018 | Jun. 25, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Feb. 04, 2019 |
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
CARES Act Loan Description | Principal and interest payments on any unforgiven portion of the PPP Funds (the “PPP Loan”) will be deferred for six months and will accrue interest at a fixed annual rate of 1.0% and carry a two year maturity date. There is no prepayment penalty on the CARES Act Loan. | |||||||||||||||||||||||||||||||
Debt conversion amount converted | $ 64,257 | $ 1,042,254 | ||||||||||||||||||||||||||||||
Common stock, shares issued (in Shares) | 1,082,731 | |||||||||||||||||||||||||||||||
Description of promissory note | On May 6, 2019, the remaining principal balance of $1,452,299 was converted into shares of the Company’s common stock through an automatic forced conversion. | In addition, the Company issued a warrant (the “Warrant”) to the Lender to purchase an amount of shares of the Company’s common stock equal to $150,000 divided by the Warrant Price (as defined in the Warrant) at a price per share equal to 125% of the prior day’s closing price. | On February 21, 2018, the Company issued a convertible note with a principal amount of $500,000 and a warrant with a term of three years to purchase up to 417 shares of common stock of the Company at an exercise price of $480.00 per share to Barn 11. The exercise price of the warrant was to reduce to 85% of the closing price of the Company’s common stock if the closing price of the Company’s common stock was less than $480.00 on July 31, 2018. The note was due on January 15, 2019, and in February 2019, the maturity date was extended to June 1, 2019, and bears interest at 6% per annum. The note is convertible into common shares of the Company at a conversion price equal to the lower of 80% of the lowest volume-weighted average price during the 5 trading days immediately preceding the date of conversion and $300.00 (the “Floor”), unless the note is in default, at which time the Floor terminates. The embedded conversion option and warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $571,079 and the warrant of $158,772 resulted in a discount to the note payable of $500,000 and an initial derivative expense of $229,851. On June 1, 2019, the Company was in default on the note. As a result of the default, a 15% premium was added to the balance owed, including all accrued interest. Subsequent to the default, the new principal balance of the note is $619,362, with interest now accruing at 18% per annum. Additionally, $466,000 was added to the derivative liability balance in connection with the default. During the year ended December 31, 2019, the Company paid $25,000 of principal. The Company owed $594,362 as of March 31, 2020. Convertible promissory note, Dominion Capital, 12% interest, unsecured, matures October 17, 2020 On April 17, 2019, Dominion Capital exchanged two notes into a new note (the “Exchange Note”) with a principal amount of $1,571,134. Interest accrues on the new note at 12% per annum. All principal and accrued interest under the Exchange Note is due on October 17, 2020 and is convertible into shares of the Company’s common stock. The conversion price in effect on the date such conversion is effected shall be equal to (i) initially, $30.00 or (ii) on or after the date of the closing of the next public or private offering of equity or equity-linked securities of the Company in which the Company receives gross proceeds in an amount greater than $100,000, one hundred and five percent (105%) of the price of the common stock issuable in the offering. While during the first six months that the Exchange Note is outstanding, only interest payments are due to the holder, beginning in October 2019, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under the Exchange Note. The Exchange Note includes customary events of default, including non-payment of the principal or accrued interest due on the Exchange Note. Upon an event of default, all obligations under the Exchange Note will become immediately due and payable. The Holder was granted a right to participate in future financing transactions of the Company while the Exchange Note remains outstanding. As a result of the beneficial conversion feature associated with the Dominion notes, $314,228 was added to additional paid-in capital during the year ended December 31, 2019. In connection with the exchange, the Company recorded a loss on settlement of debt of $904,469 on the consolidated statement of operations for the year ended December 31, 2019. The Company was to begin making principal payments in equal installments beginning on October 1, 2019. On October 22, 2019, the Company reached an agreement with Dominion Capital to postpone the principal payments. In exchange for the extension, the Company will pay to Dominion Capital an extension fee equal to 14% of the postponed payments. As a result of this agreement, the Company added $47,731 of principal to note during the year ended December 31, 2019 and the three months ended March 31, 2020. During the year ended December 31, 2019 and the three months ended March 31, 2020, the Company paid $51,848 of principal. The Company owed $1,562,901 as of March 31, 2020 and will record accretion equal to the debt discount of $50,443 over the remaining term of the note. Convertible promissory note issued in connection with the acquisition of TNS, Inc. On January 4, 2019, as part of the acquisition described in Note 3, Acquisition of TNS, Inc., the Company issued to InterCloud a convertible promissory note in the aggregate principal amount of $620,000 (the “Note”). The interest on the outstanding principal due under the Note accrued at a rate of 6% per annum. All principal and accrued interest under the Note was due January 30, 2020, and was convertible, at any time at InterCloud’s election, into shares of common stock of the Company at a conversion price equal to the greater of 75% of the lowest volume-weighted average price during the 10 trading days immediately preceding the date of conversion and $30.00. The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $189,000 resulted in a discount to the note payable of $144,000. On January 28, 2019, the holder of the convertible promissory note entered into agreement to sell and assign a total of $620,000 of the $620,000 outstanding principal to two third parties, with $186,000 and $434,000 of principal assigned to each party (refer to the “Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020” and “Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020” sections of this note for further detail). The Company approved and is bound by the assignment and sale agreement. Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020 On January 28, 2019, InterCloud assigned $186,000 of the note issued in connection with the acquisition of TNS to Michael Roeske. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Roeske converted $70,000 of principal of the note into shares of the Company’s common stock. The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $29,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $145,000 pursuant to this agreement. Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020 On January 28, 2019, InterCloud assigned $434,000 of the note issued in connection with the acquisition of TNS to Joel Raven. The note accrues interest at a rate of 6% per annum and had a maturity date of January 30, 2020. During the year ended December 31, 2019, Mr. Raven converted $70,000 of principal of the note into shares of the Company’s common stock The note matured on January 30, 2020 and is in default. As a result of the default, the note balance was increased by 25% of outstanding principal, resulting in additional principal of $91,000. The interest also increased from 6% per annum to 24% per annum. At March 31, 2020, the Company owed $455,000 pursuant to this agreement. Convertible promissory note, GS Capital Partners, LLC, 8% interest, secured, matures August 2, 2020 On August 2, 2019, the Company entered into and closed on a Securities Purchase Agreement with GS Capital Partners, LLC, pursuant to which the Company issued to GS Capital Partners, LLC a senior secured convertible promissory note in the aggregate principal amount of $123,000 for an aggregate purchase price of $112,000. The interest on the outstanding principal due under the secured note accrued at a rate of 8% per annum. | |||||||||||||||||||||||||||||
Reverse stock split description | All common share, warrant, stock option, and per share information in the consolidated financial statements gives retroactive effect to the 1-for-300 reverse stock split. There was no change to the number of authorized shares of common stock or preferred stock of the Company as a result of the reverse stock split. The par value of the Company’s common stock was unchanged at $0.00001 per share post-split. | |||||||||||||||||||||||||||||||
Purchase agreement amendment description | Amendment Number 2 adjusted the amount of common stock issued on the Series C Conversion Date as follows: If on the earlier of (a) the tenth (l0th) business day prior to the listing of the Company on a national securities exchange (“Uplisting”), or (b) December 15, 2020, the aggregate value of the shares of common stock issued upon conversion of the Series C (the “Conversion Shares”) is less than 95% of the aggregate value of the Conversion Shares on the Series C Conversion Date (such difference in value, the “First Value Differential”), then the Company shall make a pro-rata issuance of additional shares of common stock to each holder in an aggregate amount equal to the First Value Differential (such additional shares, the “First True-Up Shares”). In the event (i) an Uplisting does not occur until sometime in 2021, and (ii) on such date in 2021 as the Board may determine, but in no event later than the tenth (10th) business day prior to the Uplisting (the “Second True-Up Date”), the aggregate value of the Conversion Shares as of the Second True-Up Date is less than 95% of the aggregate value of the Conversion Shares as of December 15, 2020 (such difference in value, the “Second Value Differential”), the Company shall, at the Board’s discretion, make a pro-rata issuance of additional shares of common stock to each holder in an aggregate amount equal to the Second Value Differential (such additional shares, the “Second True-Up Shares”). To the extent any shares of Series C are issued after the Series C Conversion Date, then the holder(s) of such shares shall receive the same number of Conversion Shares such holder(s) would have received had they held the Series C on the Series C Conversion Date. | |||||||||||||||||||||||||||||||
Aggregate principal amount | $ 299,972 | $ 1,325,895 | ||||||||||||||||||||||||||||||
RDM Capital Funding [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Cash discount | $ 62,652 | |||||||||||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Preferred stock, convertible, conversion price, decrease (in Dollars per share) | $ 3 | |||||||||||||||||||||||||||||||
Description of promissory note | the Company made the fourth amendment to the Certificate of Designation of its Series A preferred stock, which lowered the fixed conversion price to $0.20 per share and the conversion price floor to $0.01 per share. | |||||||||||||||||||||||||||||||
Reverse stock split description | On April 14, 2020, the Company filed a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of the state of Nevada to effect a 1-for-300 reverse stock split with respect to the outstanding shares of the Company’s common stock. The Certificate of Amendment became effective on April 14, 2020 with the state of Nevada, and on April 20, 2020, Financial Industry Regulatory Authority, Inc. (FINRA) made the announcement of the reverse stock split. The reverse stock split was previously approved by the board of directors and the majority of stockholders of the Company. The reverse stock split was deemed effective at the open of business on April 21, 2020. As a result of the reverse stock split, every three hundred (300) shares of outstanding common stock of the Company as of April 14, 2020 were converted into one (1) share of common stock. Fractional shares resulting from the reverse stock split will be rounded up to the next whole number. All common share, warrant, stock option, and per share information in the consolidated financial statements gives retroactive effect to the 1-for-300 reverse stock split. There was no change to the number of authorized shares of common stock or preferred stock of the Company as a result of the reverse stock split. The par value of the Company’s common stock was unchanged at $0.00001 per share post-split. | |||||||||||||||||||||||||||||||
Purchase agreement description | On April 14, 2020, the Company entered into Amendment Number 2 of the share purchase agreement with WaveTech GmbH. Amendment Number 2 replaced the conversion terms of the Series C preferred stock included with Amendment Number 1 with the following: Conversion. On the second business day following the earlier of (i) the later of (A) April 30, 2020, or such later date as may be determined by the Board, and (B) a reverse split of the common stock. (ii) the listing of the Company on a national securities exchange and (iii) the six-month anniversary of the issuance of shares of Series C to such holder (such earliest date. the “Series C Conversion Date”), without any further action, all outstanding shares of Series C shall automatically convert into an aggregate number of shares of common stock equal to $90,000,000 (the “Aggregate Value”)/Strike Price (as defined below). Provided, however, if a Triggering Event (as defined below) occurs, the Aggregate Value shall be reduced by the amount of any losses (as defined below). “Strike Price” shall mean the closing price per share of the Company’s common stock on the trading day immediately preceding the Series C Conversion Date. | |||||||||||||||||||||||||||||||
Subsequent Event [Member] | AWS [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Subsidiaries received | $ 78,000 | $ 672,400 | ||||||||||||||||||||||||||||||
Subsequent Event [Member] | Adex [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Subsidiaries received | $ 2,682,125 | |||||||||||||||||||||||||||||||
Subsequent Event [Member] | Power Up Lending Group LTD [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Shares issued (in Shares) | 118,554 | 62,359 | 113,379 | 77,912 | 38,956 | 8,621 | 9,196 | 5,715 | 118,777 | 118,554 | 58,434 | 12,122 | ||||||||||||||||||||
Debt conversion amount converted | $ 20,000 | $ 5,000 | $ 20,000 | $ 20,000 | $ 10,000 | $ 15,000 | $ 16,000 | $ 12,000 | $ 16,500 | $ 20,000 | $ 15,000 | $ 20,000 | ||||||||||||||||||||
Accrued interest | $ 5,520 | $ 2,540 | $ 240 | |||||||||||||||||||||||||||||
Common stock, shares issued (in Shares) | 8,334 | |||||||||||||||||||||||||||||||
Subsequent Event [Member] | Power Up Lending Group LTD One [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Shares issued (in Shares) | 71,132 | 8,621 | ||||||||||||||||||||||||||||||
Debt conversion amount converted | $ 12,000 | $ 15,000 | ||||||||||||||||||||||||||||||
Subsequent Event [Member] | Dominion Capital [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Debt conversion description | On April 2, 2020, in connection with the convertible debenture outstanding to Dominion Capital, the Company paid a $20,000 modification fee in order to avoid an event of default under the note and receive payment forbearance for a period of 30 days. | |||||||||||||||||||||||||||||||
Common stock, shares issued (in Shares) | 8,334 | 75,000 | ||||||||||||||||||||||||||||||
Shares converted (in Shares) | 25,000 | 15,000 | 25,000 | |||||||||||||||||||||||||||||
Share price (in Dollars per share) | $ 1 | $ 1 | $ 1 | $ 1 | ||||||||||||||||||||||||||||
Subsequent Event [Member] | M2B Funding [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Common stock, shares issued (in Shares) | 85,000 | |||||||||||||||||||||||||||||||
Shares converted (in Shares) | 17,000 | |||||||||||||||||||||||||||||||
Share price (in Dollars per share) | $ 1 | |||||||||||||||||||||||||||||||
Subsequent Event [Member] | GS Capital Partners LLC [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Shares issued (in Shares) | 302,121 | |||||||||||||||||||||||||||||||
Debt conversion amount converted | $ 100,000 | |||||||||||||||||||||||||||||||
Accrued interest | $ 5,742 | |||||||||||||||||||||||||||||||
Subsequent Event [Member] | CCAG Investments, LLC [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Interest rate | 120.00% | |||||||||||||||||||||||||||||||
Aggregate principal amount | $ 218,534 | |||||||||||||||||||||||||||||||
Accrued interest | $ 8,534 | |||||||||||||||||||||||||||||||
Subsequent Event [Member] | FJ Vulis and Associates LLC [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Interest rate | 120.00% | |||||||||||||||||||||||||||||||
Aggregate principal amount | $ 218,247 | |||||||||||||||||||||||||||||||
Accrued interest | $ 8,247 | |||||||||||||||||||||||||||||||
Subsequent Event [Member] | RDM Capital Funding [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Cash payments | $ 116,643 | |||||||||||||||||||||||||||||||
Subsequent Event [Member] | SCS, LLC [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Shares issued (in Shares) | 23,555 | |||||||||||||||||||||||||||||||
Debt conversion amount converted | $ 4,000 | |||||||||||||||||||||||||||||||
Subsequent Event [Member] | Wave Yech GmbH [Member] | ||||||||||||||||||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||||||||||||||||||
Description of promissory note | the Company obtained additional executed assignment agreements from shareholders holding an aggregate of 30% of the issued and outstanding shares of WaveTech GmbH. As a result, as of the date of this report, the Company has obtained executed assignment agreements from shareholders holding an aggregate of 90% of the issued and outstanding shares of WaveTech GmbH. |