| Note 3 - Significant Accounting Policies | Use
of Estimates The
preparation of financial statements, in conformity with generally accepted accounting principles in the United States of America,
requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosures of
contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these estimates. Cash
Equivalents The
Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Income
Taxes The
Company accounts for income taxes under the asset and liability method, where deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation
allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. At
September 30, 2018, there were no uncertain tax positions that require accrual. Accounts
Receivable Accounts
receivable balances are established for amounts owed to the Company from its customers from the sales of services and products.
The Company closely monitors the collectability of outstanding accounts receivable and provides an allowance for doubtful accounts
based on estimated collections of outstanding amounts. The Company had accounts receivable of $185,662 and $0 and an allowance
for doubtful accounts of $132,230 and $0 as of September 30, 2018 and December 31, 2017, respectively. Revenue
recognition The
Company follows ASC 606 of the FASB Accounting Standards Codification Property
and equipment Property
and equipment are stated at cost less accumulated depreciation. The Company provides for depreciation using the straight-line
method over the estimated useful lives of the related assets, which range from three to five years. Maintenance and repair costs
are expensed as they are incurred while renewals and improvements which extend the useful life of an asset are capitalized. At
the time of retirement or disposal of property and equipment, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is reflected in the consolidated results of operations. Intangible
Assets Intangible
assets primarily consist of customer relationships, software, non-compete agreements and domain names. The Company amortizes,
to cost of revenue and operating expenses, these definite-lived intangible assets on a straight-line basis over the life of the
assets of five years. Impairment
of Long-Lived Assets and Goodwill The
carrying value of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset or asset group may not be recoverable. An impairment loss is recognized when the carrying amount of an asset
exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition.
The amount of the impairment loss to be recorded is calculated by the excess of the asset’s carrying value over its fair
value. Fair value is generally determined using a discounted cash flow analysis. The
Company tests goodwill for impairment annually as of December 31, or whenever events or changes in circumstances indicate that
goodwill may be impaired. The Company initially assesses qualitative factors to determine whether the existence of events or circumstances
leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
If, after assessing the totality of events or circumstances, the Company determines it is more likely than not that the fair value
of a reporting unit is less than its carrying amount, then the Company compares the reporting unit’s carrying amount to
its fair value. If the reporting unit’s carrying amount exceeds its fair value, an impairment charge is recorded based on
that difference. There
was no impairment of long-lived assets or goodwill during the periods presented. Convertible
debt The
Company records beneficial conversion features related to the issuance of convertible debts that have conversion features at fixed
or adjustable rates that are less than the Company’s stock prices on the respective issuance dates. The beneficial conversion
features for the convertible instruments are recognized and measured by allocating a portion of the proceeds as an increase in
additional paid-in capital and as a reduction to the carrying amount of the convertible instruments equal to the intrinsic value
of the conversion features based on the difference between the effective conversion rates and the Company’s stock prices
on the issuance dates. The beneficial conversion features are accreted by recording additional non-cash interest expense over
the expected life of the convertible notes. Software
Development Costs, Customer Relationships, Non-Compete, Domain Name and Amortization The
Company capitalizes software development costs in accordance with Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 985-20. Software development costs are capitalized after
technological feasibility is established. Once the software products become available for general release to the public, the
Company amortizes such costs over the related product’s estimated economic useful life to general and administrative
expenses. Net capitalized software development costs (included in intangible assets) totaled $149,133 (acquired via issuance
of $64,000 of Series B Preferred Stock and $55,000 in accounts payable) at September 30, 2018 and December 31, 2017,
respectively. A non-compete agreement, domain name, goodwill, website, customer list and developed technology totaling
$1,047,152, were acquired via the acquisition of 1922861 Ontario Inc as an asset purchase via issuance of 500,000 restricted
common shares. Amortization expense totaled $52,436 and $0 and $134,942 and $0 for the three and nine months ended September
30, 2018 and 2017, respectively. Net
Income (Loss) Per Share Basic
earnings (loss) per share is computed by dividing net income, or loss, by the weighted average number of shares of common stock
outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income, or loss, by the weighted average
number of shares of common stock outstanding for the period, assuming conversion or exercise of all potentially dilutive securities
outstanding during each reporting period presented. Potentially dilutive securities are not presented or used in the computation
of diluted loss per share on the statement of operations for periods when the Company incurs net losses, as their effect would
be anti-dilutive. As
of September 30, 2018 and December 31, 2017, the Company had 0 and 25,000 shares, respectively, of Series A Preferred Stock issued
and outstanding, which were convertible into 0 and 25,000 shares, respectively, of the Company’s common stock. Also, as
of September 30, 2018 and December 31, 2017, the Company had 64,000 shares of Series B Convertible Preferred Stock issued and
outstanding, which were convertible into 12,800 shares of the Company’s common stock. As of December 31, 2017, there was
a convertible note outstanding that could convert to a total of 490,000 common shares. As of September 30, 2018, the Company had
committed 2,625,000 common shares for issuance as part of the acquisition of A.J.D. Data Services (see Note 9 – Acquisition
of A.J.D. Data Services Note 10 – Acquisition of 1922861 Ontario Inc) Principals
of Consolidation The
consolidated financial statements represent the results of DLT Resolution, Inc.; its wholly owned subsidiary, DLT Resolution Corp.;
its 80%-owned subsidiary, A.J.D. Data Services (see Note 9 – Acquisition of A.J.D. Data Services) Note 10 – Acquisition of 1922861 Ontario Inc.) Foreign
Currency Translation The
functional currency of the Company’s subsidiaries in Canada is the Canadian Dollar. The subsidiaries’ assets and liabilities
have been translated to U.S. dollars using exchange rates of .775151 and .774954 in effect at the balance sheet dates of September
30, 2018 and December 31, 2017, respectively. Statements of operations amounts have been translated using the annual weighted
average exchange rates of .765195 and .777145 for the three and nine months ended September 30, 2018, and .797763 and .765623
for the three and nine months ending September 30, 2017 there were no balances or transaction in CAD in 2017. Resulting
gains or losses from translating foreign currency financial statements are recorded as other comprehensive income (loss). Foreign
currency transaction gains and losses resulting from exchange rate fluctuations on transactions denominated in a currency other
than the local currency are included in other income (expense). There were no foreign currency transaction gains or losses recognized
during the periods presented. Recently
Issued Accounting Pronouncements In
February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which supersedes the guidance in ASC 840, ”Leases.”
The purpose of the new standard is to improve transparency and comparability related to the accounting and reporting of leasing
arrangements. The guidance will require balance sheet recognition for assets and liabilities associated with rights and obligations
created by leases with terms greater than twelve months. The guidance is effective for fiscal years beginning after December 15,
2018, including interim periods within those years. Modified retrospective application is required. Early adoption is permitted.
The Company does not expect the standard to have a material impact on its consolidated balance sheets or consolidated statements
of operations. From
time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other
standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe
that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position
or results of operations upon adoption. |
