Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Sep. 04, 2019 | Jun. 29, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | DLT Resolution Inc. | ||
Entity Central Index Key | 0001420368 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | true | ||
Entity Current Reporting Status | No | ||
Document Period End Date | Dec. 31, 2018 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 | ||
Entity Ex Transition Period | true | ||
Entity Common Stock Shares Outstanding | 20,890,537 | ||
Entity Public Float | $ 7,008,280 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 12,908 | $ 8,609 |
Accounts receivable | 12,217 | |
Assets held for sale | 656,735 | |
Total current assets | 681,860 | 8,609 |
Intangible assets, net of accumulated amortization | 460,491 | 115,944 |
Goodwill | 169,896 | |
Total assets | 1,299,125 | 124,553 |
Current liabilities | ||
Bank overdraft | 7 | |
Accounts payable and accrued liabilities | 48,921 | 26,415 |
Accounts payable, related party | 40,000 | 55,000 |
Interest payable, related party | 26,875 | 19,545 |
Dividends payable | 26,697 | |
Related party payables | 17,713 | 44,679 |
Current notes payables, related party | 81,500 | 81,500 |
Derivative liability | 20,328 | |
Convertible notes payable, net of discounts of $0 and $6,916 | 4,900 | |
Liabilities held for sale | 146,127 | |
Total current liabilities | 361,136 | 279,071 |
Notes payable, net of current portion | 5,000 | 5,000 |
Other long term liability | 196,142 | |
Total liabilities | 562,278 | 284,071 |
Stockholders' equity (deficit) | ||
Common stock, $0.001 par value; 275,000,000 shares authorized; 24,982,537 and 21,572,871 issued; 21,167,537 and 17,757,871 outstanding at December 31, 2018 and December 31, 2017 | 24,983 | 21,573 |
Additional paid in capital | 4,192,678 | 3,129,894 |
Other comprehensive income | (37,688) | 16 |
Treasury stock, 3,815,000 shares | (5,300) | (5,300) |
Accumulated deficit | (3,595,912) | (3,394,701) |
Total equity (deficit) attributable to parent | 642,760 | (159,518) |
Non-controlling interest | 94,087 | |
Total stockholder?s equity (deficit) | 736,847 | (159,518) |
Total liabilities and stockholders' deficit | 1,299,125 | 124,553 |
Series A Convertible Preferred Stock | ||
Stockholders' equity (deficit) | ||
Series B convertible preferred stock, $1.00 par value; 500,000 shares authorized; 64,000 and 64,000 issued and outstanding at December 31, 2018 and December 31, 2017 | 25,000 | |
Series B Convertible Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Series B convertible preferred stock, $1.00 par value; 500,000 shares authorized; 64,000 and 64,000 issued and outstanding at December 31, 2018 and December 31, 2017 | $ 64,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current liabilities | ||
Convertible notes payable, net of discounts | $ 0 | $ 6,916 |
Stockholders' equity (deficit) | ||
Common stock; par value | $ 0.001 | $ 0.001 |
Common stock; shares authorized | 275,000,000 | 275,000,000 |
Common stock; shares issued | 24,982,537 | 21,572,871 |
Common stock; shares outstanding | 21,167,537 | 17,757,871 |
Treasury stock shares | 3,815,000 | 3,815,000 |
Series A Convertible Preferred Stock | ||
Stockholders' equity (deficit) | ||
Preferred stock; par value | $ 1 | $ 1 |
Preferred stock; shares authorized | 5,000,000 | 5,000,000 |
Preferred stock; shares issued | 0 | 25,000 |
Preferred stock; shares outstanding | 0 | 25,000 |
Series B Convertible Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock; par value | $ 1 | $ 1 |
Preferred stock; shares authorized | 500,000 | 500,000 |
Preferred stock; shares issued | 64,000 | 64,000 |
Preferred stock; shares outstanding | 64,000 | 64,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Operations | ||
Revenue | $ 227,343 | $ 2,423 |
Cost of revenue | 108,401 | 379 |
Gross margin | 118,942 | 2,044 |
General and administrative | 205,109 | 14,369 |
Professional fees | 146,615 | 24,351 |
Total operating expenses | 351,724 | 38,720 |
Income (loss) from operations | (232,782) | (36,676) |
Other income (expense) | ||
Other income | 31,834 | 26,306 |
Gain/(loss) on change in fair market value of derivative liability | (2,427) | (14,980) |
Foreign exchange gain/(loss) | (3,992) | |
Interest expense | (4,767) | (19,337) |
Total other income (expense) | 20,648 | (8,011) |
Net loss from continuing operations | (212,134) | (44,687) |
Loss from discontinued operations | (117,148) | |
Net income (loss) | (329,282) | (44,687) |
Preferred stock dividends declared | (1,249) | |
Net loss attributable to common stockholders | $ (329,282) | $ (45,936) |
Loss from continued operations per common share, basic and diluted | $ (0.01) | $ 0 |
Loss from discontinued operations per common share, basic and diluted | (0.01) | 0 |
Net loss from operations per common share, basic and diluted | $ (0.02) | $ 0 |
Weighted average basic shares outstanding | 19,263,408 | 18,571,882 |
Weighted average diluted shares outstanding | 19,263,408 | 18,571,882 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Loss | ||
Net income (loss) | $ (329,282) | $ (44,687) |
Other comprehensive loss | ||
Foreign currency translation adjustment | (35,425) | (8) |
Total other comprehensive loss | (35,425) | (8) |
Comprehensive income (loss) | $ (364,707) | $ (44,695) |
Statement Of Stockholder's Equi
Statement Of Stockholder's Equity - USD ($) | Total | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Other comprehensive income [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Non-controlling Interest [Member] |
Balance, shares at Dec. 31, 2016 | 27,333,221 | ||||||||
Balance, amount at Dec. 31, 2016 | $ (462,344) | $ 27,333 | $ 2,859,164 | $ 24 | $ (100) | $ (3,348,765) | |||
Net Income (Loss) | (44,687) | (44,687) | |||||||
Series A preferred stock issued in exchange for common stock, Shares | 25,000 | (241,700) | |||||||
Series A preferred stock issued in exchange for common stock, Amount | $ 25,000 | $ (242) | (24,758) | ||||||
Series B preferred stock issued for intangible asset, shares | 64,000 | ||||||||
Series B preferred stock issued for intangible asset, amount | 64,000 | $ 64,000 | |||||||
Common shares issued in exchange for note payable principal, shares | 1,250,000 | ||||||||
Common shares issued in exchange for note payable principal, amount | 250,000 | $ 1,250 | 248,750 | ||||||
Common shares issued in exchange for related party payable, shares | 345,350 | ||||||||
Common shares issued in exchange for related party payable, amount | 34,536 | $ 346 | 34,190 | ||||||
Common shares rescinded, shares | (7,114,000) | ||||||||
Common shares rescinded, amount | $ (7,114) | 7,114 | |||||||
Forgiveness of related party convertible note payable | 2,634 | 2,634 | |||||||
Forgiveness of related party interest payable | 2,300 | 2,300 | |||||||
Forgiveness of related party payable | 500 | $ 500 | |||||||
Related party note payable entered into for purchase of treasury stock | (100) | (100) | |||||||
Foreign currency translation adjustment | (8) | $ (8) | |||||||
Dividend declared on preferred stock | (1,249) | $ (1,249) | |||||||
Dividends payable written back for preferred stock | |||||||||
Notes payable entered into for purchase of treasury stock | $ (5,100) | $ (5,100) | |||||||
Balance, shares at Dec. 31, 2017 | 25,000 | 64,000 | 21,572,871 | ||||||
Balance, amount at Dec. 31, 2017 | $ (159,518) | $ 25,000 | $ 64,000 | $ 21,573 | $ 3,129,894 | $ 16 | $ (5,300) | $ (3,394,701) | |
Net Income (Loss) | (329,282) | $ (201,213) | (128,069) | ||||||
Forgiveness of related party convertible note payable | |||||||||
Forgiveness of related party interest payable | |||||||||
Forgiveness of related party payable | |||||||||
Foreign currency translation adjustment | (35,425) | $ (37,704) | 2,279 | ||||||
Issuance of common stock for cash proceeds, shares | 745,778 | ||||||||
Issuance of common stock for cash proceeds, amount | 236,000 | $ 746 | 235,254 | ||||||
Issuance of common stock for acquisitions, shares | 2,575,000 | ||||||||
Issuance of common stock for acquisitions, amount | 778,497 | $ 2,575 | 775,922 | ||||||
Dividends payable written back for preferred stock | 26,697 | 26,697 | |||||||
Stock split rounding, shares | 63,888 | ||||||||
Stock split rounding, amount | $ 64 | (64) | |||||||
Conversion of preferred stock to common stock, shares | (25,000) | 25,000 | |||||||
Conversion of preferred stock to common stock, amount | $ (25,000) | $ 25 | $ 24,975 | ||||||
Non-controlling interest in acquisition | $ 219,877 | $ 219,877 | |||||||
Balance, shares at Dec. 31, 2018 | 64,000 | 24,982,537 | |||||||
Balance, amount at Dec. 31, 2018 | $ 736,847 | $ 64,000 | $ 24,983 | $ 4,192,678 | $ (37,688) | $ (5,300) | $ (3,595,912) | $ 94,087 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | ||
Net (loss) income from continuing operations | $ (212,134) | $ (44,687) |
Net (loss) from discontinued operations, net of income taxes | (220,263) | |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Gain on settlement of debt | (26,307) | |
Derivative liability written back | (22,755) | |
Amortization of debt discounts | 4,900 | |
Depreciation and amortization expense | 88,142 | 3,056 |
Loss on change in fair market value of derivative liability | 2,427 | 14,980 |
Excess fair market value of derivative liability charged to interest | 448 | |
Expenses paid on behalf of the company by related parties | 19,418 | |
Changes in operating assets and liabilities | ||
Accounts receivable | 2,629 | |
Interest payable, related party | 7,330 | 9,246 |
Accounts payable and accrued liabilities | 14,594 | 19,617 |
Accounts payable, related party | (15,000) | |
Net cash provided/used in continuing operating activities | (134,767) | 672 |
Net cash provided/used by discontinued operating activities | 1,627 | |
Net cash provided/used in operating activities | (133,140) | 672 |
Net cash used in investing activities | ||
Net cash paid for asset acquisition | (14,825) | |
Net cash used in continuing investing activities | (14,825) | |
Net cash provided/used in discontinued investing activities | (5,977) | |
Net cash used in investing activities | (20,802) | |
Cash flows from financing activities | ||
Proceeds from related party payables | 7,924 | |
Payments to related party | (26,943) | |
Repayments of convertible notes payable | (4,900) | |
Proceeds from the sale of common stock | 236,000 | |
Net cash provided by continuing financing activities | 204,157 | 7,924 |
Net cash provided/used in discontinued financing activities | 3,718 | |
Net cash provided by financing activities | 207,875 | 7,924 |
Net change in cash | 53,933 | 8,596 |
Effect of exchange rate on cash | (18,972) | 13 |
Cash at beginning of period | 8,609 | |
Cash and cash equivalents of discontinued operations | 30,954 | |
Cash and cash equivalents of continued operations | 12,908 | 8,609 |
Supplemental cash flow information | ||
Cash paid for interest | ||
Cash paid for income taxes | ||
Non-cash investing and financing activities | ||
Common shares issued for acquisition of AJD Data Services | 360,585 | |
Common shares issued in exchange for preferred shares | 25,000 | |
Common shares issued for asset purchase | 417,815 | |
Other long term payable for Ontario Inc. acquisition | 196,142 | |
Forgiveness of related party convertible note payable | 2,634 | |
Forgiveness of related party interest payable | 2,300 | |
Forgiveness of related party payable | 500 | |
Initial measurement of derivative liability | 4,900 | |
Series A preferred stock issued in exchange for common stock | 25,000 | |
Series B preferred stock issued for intangible asset | 64,000 | |
Common shares issued in exchange for related party payable | 34,536 | |
Common shares issued in exchange for note payable principal | 250,000 | |
Accounts payable entered into for intangible asset | 55,000 | |
Accounts payable paid by related party | 12,569 | |
Accounts payable paid by convertible noteholder | 4,900 | |
Related party note payable entered into for purchase of treasury stock | 200 | |
Notes payable entered into for purchase of treasury stock | 5,000 | |
Preferred dividend declared | $ 1,249 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2018 | |
Nature of Business | |
Note 1 - Nature of Business | The Company was organized on January 17, 2007 (Date of Inception) under the laws of the State of Nevada, as DBL Senior Care, Inc. and subsequently changed its name to DLT Resolution Inc on December 4, 2017. DLT Resolution Inc. (“DLT”) currently operates in three high-tech industry segments: Blockchain Applications; Telecommunications; and Data Services which includes Image Capture, Data Collection, Data Phone Center Services, and Payment Processing. The Company completed its acquisitions of A.J.D Data Services (“A.J.D”) as on January 21, 2018 and 1922861 Ontario Inc. (“Ontario”) as on April 12, 2018. See Note 9 – Acquisition of A.J.D. Data Services Note 10 – Acquisition of 1922861 Ontario Inc. The Company offers secure data management, Information Technology (IT) and other telecommunications services in Canada and the United States. Through its RecordsBank.org portal it operates a Health Information Exchange. DLT Resolution also operates a Health Information Exchange providing the ability to request and retrieve medical information and records while meeting all of today’s Security & Compliance demands for HIPAA, PIPEDA and PHIPA. The Company is preparing to launch a Distributed Ledger Technology “Blockchain” version of the service placing electronic health records on this secure platform. The Company has finished making the “Blockchain” but has yet to launch the initiative yet. The Company expects to launch this initiative during the third calendar quarter of 2019. Previously, the Company’s business plan and objective through late 2016 was to focus on hemorrhoid medical procedures for which it entered into a license agreement to open hemorrhoid treatment centers and promote the Ultroid Hemorrhoid System globally. However, the Company under new Management, ceased that plan. The Company has its distributed ledger technology architecture in place for electronic health records, it has opted to defer its plans for a utility token sale. A Utility Token allows a purchaser to exchange tokens for use of a utility, in this case using Records Bank in the capacity of any prospective stakeholder involved in the exchange of electronic heath records. Management’s decision to defer the sale is based on its judgement of market conditions for said sale. This will be done further down the road when the funds are available to produce the utility token sale. DLT operates in Canada through its wholly owned subsidiary DLT Resolution Corp., its majority owned subsidiary A.J.D. Data Services Ltd. and a wholly owned subsidiary DLT Data Services Ltd. formed in December 2018. Additionally, on January 14, 2019, the Company sold 70 of the 80 shares purchased in A.J.D. Data Services Ltd and the Company will continue to hold a 10% interest in AJD Data. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies | |
Note 2 - Significant Accounting Policies | Estimates The preparation of financial statements in conformity with 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. Actual results could differ from those estimates. Cash For the Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents. Income taxes Income taxes are provided for using the liability method of accounting in accordance with FASB ASC Topic 740 (formally SFAS No. 109 “Accounting for Income Taxes”). A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment. At December 31, 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 provide an allowance for doubtful accounts based on estimated collections of outstanding amounts. Revenue Recognition The Company follows ASC 606 of the FASB Accounting Standards Codification During the year ended December 31, 2018, the Company generated revenues from the sale of general information technology services focused on telephone system set up. The Company generated revenues of $227,343 and $2,423 during the years ended December 31, 2018 and 2017, respectively. The increase in revenue is the result of the Company’s acquisitions of 1922861 Ontario Inc. 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 which range from five to seven 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 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. Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassification had no effect on the reported results of operation. Share Based Expenses The Company complies with FASB ASC Topic 718 Compensation—Stock Compensation, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that is based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. FASB ASC Topic 718 primarily focuses on accounting for transactions in which an entity obtains employee services in share-based payment transactions. This statement requires a public entity to expense the cost of employee services received in exchange for an award of equity instruments. This statement also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. Net Income (Loss) Per Share Net loss per share is calculated in accordance with FASB ASC topic 260.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 December 31, 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 December 31, 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, 2018 there is a potential earn out of an additional 500,000 restricted common shares of stock from the acquisition of 1922861 Ontario Inc (see 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 0.732902 and 0.774954 in effect at the balance sheet dates of December 31, 2018 and December 31, 2017, respectively. Statements of operations amounts have been translated using the annual weighted average exchange rates of 0.772077 for the year ended December 31, 2018. 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 was $3,992 currency transaction losses recognized during the periods presented. Fair Value of Financial Instruments Fair value of certain of the Company’s financial instruments including cash, prepaid expenses, accounts payable, accrued expenses, notes payable, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments. Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk. Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values. Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income. Recently Issued Accounting Pronouncements In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification,” In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” In November 2016, the FASB issued ASU 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash In October 2016, the FASB issued ASU 2016-16, “ Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-02, Income Statement Reporting, Comprehensive Income (Topic 220) Management believes recently issued accounting pronouncements will have no impact on the financial statements of the Company. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2018 | |
Going Concern | |
Note 3 - Going Concern | The Company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company has limited cash, accumulated losses of $3,595,912 and is doubtful to recover $329,815 (CAD 450,000) of the note receivable received against the subsequent sale of its subsidiary. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The officers and directors have committed to advancing certain operating costs of the Company. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions | |
Note 4 - Related Party Transactions | No salaries were paid to directors or executives during the periods ended December 31, 2018 or 2017. All related party intercompany transactions have been eliminated. Related party payables had a balance of $17,713 and $44,679 for the years ended December 31, 2018 and 2017 respectively. During the years ended December 31, 2018 and 2017, the Company received loans from related parties totaling $6,748 (including $3,496 from Gilles Trahan and $3,252 from Venecia Gafter) and $19,418 respectively to fund operations via expenses paid directly to vendors on behalf of the Company. Of this amount, $0 and $12,596 was paid towards outstanding payables and $6,748 and $6,849 towards current period expenses. These loans are non-interest bearing are due on demand and as such included in current liabilities. Imputed interest has been considered, but determined to be immaterial to the financial statements as a whole. Additionally, the Company’s wholly owned subsidiary, DLT resolution Corp had paid $33,691 to the related parties. Accounts payable, related party had a balance of $40,000 and $55,000 for the periods ended December 31, 2018 and 2017 respectively. The amounts used in accounts payable, related party relates to software development cost paid for on behalf of the company by Gilles Trahan. During the year, $15,000 has been paid by DLT Resolution Corp to the related party. Interest payable, related party had a balance of $26,875 and $19,545 for the years ended December 31, 2018 and 2017 respectively. The interest payable relates to a current notes payable, related party and accrues interest at 9% per annum. $7,330 of interest expense was accrued for the year ended December 31, 2018. Current notes payable, related party had a balance of $81,500 and $81,500 for the years ended December 31, 2018 and 2017 respectively. This balance consists of one note payable to one related company and accrues interest at 9% per annum. No principal payments were made in 2018. A related party receivable of CAD $45,337 from Peter Darbyson who is a minority shareholder in its majority owned subsidiary A.J.D. Data Services Lt. has been written off. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity | |
Note 5 - Stockholders' Equity | Series A Convertible Preferred Stock The Company is authorized to issue up to 5,000,000 shares of Series A Convertible Preferred Stock. The Series A Convertible Preferred Stock can be converted to common shares at the option of the holder at a rate of $1 per share. During the year ended December 31, 2018, the Company accepted the conversion of 25,000 shares of Series A Convertible Preferred Stock in exchange for 25,000 shares of common stock. There were 0 and 25,000 shares of series A convertible preferred stock issued and outstanding as of December 31, 2018 and December 31, 2017, respectively. Additionally, the Company had accrued dividends payable on series A convertible preferred stock totaling $ 0 and $26,697 at December 31, 2018 and December 31, 2017, respectively. As at December 31, 2018, the Company has written back all the dividends payable liability to additional paid in capital with the consent of shareholders. Series B Convertible Preferred Stock The Company is authorized to issue up to 500,000 shares of Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock can be converted to common shares at the option of the holder at a rate of $0.20 per share. There were 64,000 shares of series B convertible preferred stock issued and outstanding as of December 31, 2018 and December 31, 2017. Common Stock The authorized common stock of the Company consists of 275,000,000 shares and carries a par value of $0.001. During the year ended December 31, 2014, the Company bought back 38,000 post-split shares of common stock into treasury from a former officer for $100. The shares are being carried as treasury shares as reflected on the balance sheet. During the year ended December 31, 2017, the Company issued a $5,000 note payable and $200 related party payable for a total of 3,777,000 outstanding common shares which are carried as treasury stock. There were 3,815,000 common shares held as treasury stock as of December 31, 2018 and December 31, 2017, respectively. During the year ended December 31, 2018, the Company issued 745,778 common shares for cash proceeds of $236,000; 1,575,000 common shares valued at $360,729 for the acquisition of A.J.D. Data Services; 1,000,000 common shares valued at $417,815 for the acquisition of 1922861 Ontario Inc; 25,000 common shares for the conversion of 25,000 shares of Series A Convertible Preferred Stock and 63,888 common shares for rounding differences from the effect of a reverse stock split effected during the year ended December 31, 2017. There were 24,982,537 and 21,572,871 common shares issued and 21,167,537 and 17,757,871 outstanding at December 31, 2018 and December 31, 2017, respectively. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable | |
Note 6 - Notes Payable | Related Party During the year ended December 31, 2015, the Company entered into a note payable with a related party as a settlement for payment of consulting services provided valued at $350,000. The note carries interest of 9% compounded annually and was due on November 19, 2016. During the year ended December 31, 2016, the Company issued 50,000 shares of series A convertible preferred stock as repayment of $31,500 of accrued interest and $18,500 of outstanding principal. Additionally, on January 31, 2017, the Company issued 1,250,000 shares of common stock as repayment of $250,000 of principal. There was $81,500 and $81,500 of principal and $26,875 and $19,545 of accrued interest due as of December 31, 2018 and December 31, 2017. Non – Related Party On August 1, 2017, the Company entered into a note payable with an unrelated party to purchase common stock held by the unrelated party. The note is due on July 1, 2019 and bears no interest. There was $5,000 and $5,000 due as of December 31, 2018 and December 31, 2017. |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Convertible Notes Payable | |
Note 7 - Convertible Notes Payable | On May 22, 2017, the Company entered into a convertible note payable with an unrelated party for $4,900 which was paid to a vendor on the Company’s behalf. The note carried interest at 10% per annum, was due on demand and was convertible at the option of the holder into common stock of the Company at a rate equal to the lesser of a 50% discount from the last trade price of the stock or $0.01 per share. There was $0 and $4,900 of principal and $0 and $3,048 of accrued interest due as of December 31, 2018 and December 31, 2017, respectively, which is included in “accounts payable and accrued liabilities” on the balance sheet. See Note 8 – Derivative Liability |
Derivative Liability
Derivative Liability | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Liability | |
Note 8 - Derivative Liability | As of December 31, 2018 and December 31, 2017, Company had a derivative liability balance of $0 and $20,328 on the balance sheets and recorded loss of $2,427 and $14,980 for the years ended December 31, 2018 and 2017, respectively. The derivative liability activity comes from convertible notes payable as follows: As discussed in Note 7 – Convertible Notes Payable The Company carries its derivative liability on the balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change. The Company fair-values the embedded derivative using the Black-Scholes option pricing model. The fair value of the derivative at the issuance date of this note was $5,348 which was recorded as a derivative liability on the balance sheet. The Company recorded a debt discount of $4,900 which was equal to the face value of the convertible note, and immediately expensed $448. Although the note was due on demand, upon issuance the Company estimated a six-month repayment period, over which they amortized the debt discount in full. As such, the Company recorded $4,900 in amortization expense during the year ended December 31, 2017. The convertible note was repaid in full on May 22, 2018, on which date the Company determined the derivative’s fair value to be $22,775, which was written back during the year and resulted in a $2,427 net loss from change in fair value for the six months ended June 30, 2018. The fair value of the embedded derivatives for the notes was determined using a Black Scholes valuation model based on the following assumptions: (1) expected volatility of 338%, (2) risk-free interest rate of 2.13%, and (3) expected life of 0.50 of a year. There is no derivative liability outstanding as of December 31, 2018. |
Acquisition of A.J.D. Data Serv
Acquisition of A.J.D. Data Services | 12 Months Ended |
Dec. 31, 2018 | |
Nature of Business | |
Note 9 - Acquisition of A.J.D. Data Services | On January 21, 2018, the Company entered into and closed the transactions contemplated by the definitive stock purchase agreement and plan of re-organization by and among the Company, A.J.D. Data Services Ltd., a limited liability company organized under the laws of Ontario (“A.J.D.”), the stockholders of A.J.D. and other parties signatory thereto to acquire 80 shares, representing 80% of the issued and outstanding capital stock of A.J.D. for 525,000 restricted common shares of the Company valued at $120,195. The first milestone earnout was met on September 21, 2018 resulting in additional 1,050,000 restricted common shares of the Company valued at $240,390. A.J.D. is focused on document imaging, telemarketing, data entry, document management and all other back-end functions. The acquisition is intended to be part of a tax-free share-for-share exchange which will see DLT Resolution issuing restricted common shares on closing and an additional 2,625,000 restricted common shares upon meeting the following milestones: · 1,050,000 Shares upon A.J.D Data Services reaching $1,000,000 in cumulated gross sales · 525,000 Shares upon A.J.D Data Services reaching $1,500,000 in cumulated gross sales with $100,000 in pre-tax earnings · 525,000 Shares upon A.J.D Data Services reaching $2,000,000 in cumulated gross sales with $150,000 in pre-tax earnings · 525,000 Shares upon A.J.D Data Services reaching $2,500,000 in cumulated gross sales with $200,000 in pre-tax earnings The Company applied the acquisition method to the business combination and valued each of the assets acquired (cash, accounts receivable, equipment, customer relationships, software, domain names and non-compete agreements) and liabilities assumed (accounts payable and related party payable) at fair value as of the acquisition date. The carrying values of cash, accounts receivable, accounts payable and related party payable were deemed to be fair value as of the acquisition date. The Company determined the fair value of the equipment to be historical net book value. The preliminary allocation of the purchase price was based on estimates of the fair value of the assets and liabilities assumed based on provisional amounts. However, the allocation of the excess purchase price and the amounts allocated to intangible assets are now as per the valuation of assets and liabilities performed by an independent valuer. Under the purchase agreement, the Company issued 525,000 shares of common stock valued at $120,195 and committed to issue an additional 3,675,000 shares of common stock at certain milestones which was determined to have a fair value of $841,366 in exchange for 80% interest. The estimated fair value of the common stock to be issued of $600,880 was eliminated against the investment as assets and liabilities held for sale. ASSETS ACQUIRED Cash $ 302 Accounts receivable 37,590 Equipment 22,743 Customer relationships 201,759 Software 156,124 Non-compete agreement 172,136 Domain name 6,405 Goodwill 654,389 TOTAL ASSETS ACQUIRED $ 1,251,448 LIABILITIES ASSUMED Accounts payable 49,380 Related party payable 317 TOTAL LIABILITIES ASSUMED 49,697 Non-controlling interest 240,190 NET ASSETS ACQUIRED $ 961,561 The intangible assets acquired will be amortized over 5 years. The non-controlling interest was valued using an enterprise value approach whereby the total value of all net assets of A.J.D. were valued with the non-controlling interest representing the minority interest percentage of the net assets as of the date of acquisition. The non-controlling interest was determined to have a fair value of $240,190 as of the date of acquisition. From the period of acquisition on January 21, 2018 to December 31, 2018, A.J.D. generated total revenues of $554, 351. However, revenues of $37,085 earned were not correct and we had to accrue an allowance for bad debts on a large portion of these monies due to management of A.J.D. not being forthcoming in their accounting records. See note on discontinued operations for further information regarding the allowance for doubtful accounts. |
Acquisition of 1922861 Ontario
Acquisition of 1922861 Ontario Inc. | 12 Months Ended |
Dec. 31, 2018 | |
Acquisition of 1922861 Ontario Inc. | |
Note 10 - Acquisition of 1922861 Ontario Inc. | Acquisition of Operating Assets On April 12, 2018, the Company entered into and closed the transactions contemplated by the definitive asset purchase agreement and plan of re-organization by and among the Company, 1922861 Ontario Inc. a corporation organized under the laws of Ontario (“ 1922861 Ontario Inc. In addition to the consideration on closing, an additional 500,000 restricted common shares may potentially be issued upon meeting the following milestone: · 500,000 shares will be issued upon the acquired base generating CAD $500,000 in cumulated gross sales with a 10% pre-tax profit. The Company has allotted 24 months to achieve this milestone. There is full acceleration to allow for full vesting as quickly as the cumulative sales milestones are reached. Share issuances will be issued under reliance of appropriate exemptions from registration with the Securities & Exchange Commission and will contain substantial resale restrictions. The Company applied the acquisition method to the business combination and valued each of the assets acquired (cash, accounts receivable, equipment, customer relationships, software, domain names and non-compete agreements) and liabilities assumed (accounts payable and related party payable) at fair value as of the acquisition date. The carrying values of cash, accounts receivable, accounts payable and related party payable were deemed to be fair value as of the acquisition date. The Company determined the fair value of the equipment to be historical net book value. The preliminary allocation of the purchase price was based on estimates of the fair value of the assets and liabilities assumed based on provisional amounts. However, the allocation of excess purchase and the amounts allocated to intangible assets are now as per valuation of assets and liabilities performed by independent valuer. Under the purchase agreement, the Company issued 1,000,000 shares of common stock valued at $417,815 and committed to issue an additions 500,000 shares of common stock at certain milestones which was determined to have a fair value of $212,520 in exchange for all assets. The estimated fair value of the common stock to be issued of $196,142 is shown as an “other long-term liability” on the face of the balance sheet. The following table shows the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: ASSETS ACQUIRED $ Accounts receivable 18,663 Customer list 103,255 Developed technology 321,679 Domain and trade name 3,971 Non-compete 37,330 Goodwill 169,896 TOTAL ASSETS ACQUIRED $ 654,794 LIABILITIES ASSUMED Accounts payable 22,197 HST payable 2,147 TOTAL LIABILITIES ASSUMED 24,344 NET ASSETS ACQUIRED $ 630,450 |
Pro-Forma Financials for Acquis
Pro-Forma Financials for Acquisitions in 2018 (combined 1922861 Ontario Inc and A.J.D. Data Services) | 12 Months Ended |
Dec. 31, 2018 | |
Pro-Forma Financials for Acquisitions in 2018 (combined 1922861 Ontario Inc and A.J.D. Data Services) | |
Note 11 - Pro-Forma Financials for Acquisitions in 2018 (combined 1922861 Ontario Inc and A.J.D. Data Services) | In accordance with ASC 805-10-50, the Company is providing the following unaudited pro-forma to present a summary of the combined results of the Companys consolidated operations with all acquisitions. as if the acquisitions had been completed as of the beginning of the reporting period. Adjustments were made to eliminate any inter-company transactions in the periods presented. DLT RESOLUTION, INC. Unaudited Pro-Forma Consolidated Statements of Operations Year ended December 31, 2018 2017 Revenue $ 953,430 $ 2,423 Cost of revenue 144,210 379 Gross margin 809,220 2,044 Operating expenses General and administrative 968,845 14,369 Professional fees 235,328 24,351 Total operating expenses 1,204,172 38,720 Income (loss) from operations (394,951 ) (36,676 ) Other income (expense) Other income 32,204 26,306 Gain/(loss) on change in fair market value of derivative liability (2,427 ) (14,980 ) Foreign exchange gain/(loss) (3,992 ) - Interest expense (4,767 ) (19,337 ) Total other income (expense) 21,018 (8,011 ) Net loss $ (373,933 ) $ (44,687 ) Preferred stock dividends declared $ - $ (1,249 ) Net income (loss) $ (373,933 ) $ (45,936 ) Net loss per common share, basic and diluted $ (0.02 ) $ (0.00 ) Weighted average basic shares outstanding 19,263,408 18,571,882 Weighted average diluted shares outstanding 19,263,408 18,571,882 See accompanying notes to consolidated financial statements. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Note 12 - Income Taxes | We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Pursuant to FASB ASC Topic 740, when it is more likely than not that a tax asset cannot be realized through future income, the Company must provide an allowance for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry-forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry-forward period. The Company records estimated losses from interest and penalties arising from taxes remitted late as well as unrecognized tax benefits as they are incurred as general and administrative expenses. The Company did not have accrued interest or penalties related to income taxes as of December 31, 2018 or 2017. The Company has not filed the 2018 tax returns with the IRS as of the date of this filing. The sources and tax effects of the temporary differences for the periods presented are as follows (rounded to the nearest thousand): December 31, 2018 December 31, 2017 Net operating loss carry forward $ 1,172,000 $ 828,000 Applicable Canadian Federal and Provincial tax rates 26.5 % 26.5 % Deferred tax asset related to net operating losses 317,000 219,000 Deferred tax asset relating to debt discounts and derivative liability (at 26.55) (5,000 ) 5,000 Valuation allowance (312,000 ) (224,000 ) Net deferred tax asset $ - $ - A reconciliation of income taxes computed at the United States federal statutory rate of 21% and 35% to the income tax recorded is as follows: December 31, 2018 (21%) December 31, 2017 (35%) Tax benefit at United States Federal statutory rate $ 27,000 $ 16,000 Differences in U.S. and Canadian tax rates on provision 7,000 (5,000 ) Increase in valuation allowance (34,000 ) (11,000 ) Income tax provision $ - $ - The Company did not pay any income taxes during the years ended December 31, 2018 or 2017, or since inception. The net federal operating loss carry forward will begin to expire in 2026. This carry forward may be limited upon the consummation of a business combination under IRC Section 381. Tax years commencing at inception remain open for examination by the IRS, where applicable. Effective January 1, 2018, the U.S. Congress enacted the “Tax Jobs and Cuts Act” which, among other things, reduced the maximum corporate tax rate to 21%. There is no impact on deferred tax asset valuations related to this change due to the fact that the Company’s operations primarily reside in Canada. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations | |
Note 13 - Discontinued Operations | Please see note 18 on the subsequent events regarding the items that happened after December 31, 2018. Due to the subsequent events the Company has completely phased out of A.J.D Data Services, Ltd. The assets and liabilities associated with the business are displayed as assets and liabilities held for sale as of December 31, 2018. They are listed as assets and liabilities held for sale due to the fact that the company divested itself of all investment in A.J.D. Data Services besides 10% interest on January 14, 2019 for a note receivable of $329,815 (CAD 450,000). As at December 31, 2018, value of the assets and liabilities has been presented at their net realizable value considering the value of note receivable. Additionally, the revenues and costs associated with this business are displayed as a loss from discontinued operations for the year ended December 31, 2018. Total assets and liabilities included in discontinued operations were as follows: Assets from Discontinued Operations: December 31, 2018 Cash 30,954 Accounts receivable 166,134 Allowance for doubtful accounts (141,280 ) Equipment, net of accumulated depreciation 17,678 Intangible assets, net of accumulated amortization 394,041 Goodwill 189,208 Total assets from discontinued operations $ 656,735 Liabilities from Discontinued Operations: Accounts payable and accrued liabilities 144,185 Related party payables 1,942 Total liabilities from discontinued operations $ 146,127 The accounts payable and accrued liabilities of discontinued operations stated above include a HST / GST liability of $42,807 and payroll tax liability of $76,761 payable to Canada Revenue Agency. Further, the Company has not filed its HST / GST returns for the year ended December 31, 2018. Net loss from discontinued operations for the year ended December 31, 2018 were comprised of the following components: Net loss from discontinued operations December 31, 2018 Net sales $ 554,351 Cost of sales - Gross profit 554,351 Operating expenses General and administrative 700,472 Professional fees 74,494 Total operating expenses 774,966 Other income (expense) Interest expense (20 ) Interest income 370 Loss on discontinued operations 103,116 Total other income (expense) 103,466 Net loss from discontinued operations $ (117,148 ) |
Concentrations of Revenue
Concentrations of Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Going Concern | |
Note 14 - Concentrations of Revenue | The Company receives more than 23% of its revenue from five major customers. The Company is endeavoring to acquire more customers and has been successful in the current year doing so. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Note 15 - Commitments and Contingencies | On August 4, 2018 DLT Resolution Inc. (“DLT”) was served with a statement of claim from a minority shareholder and former officer of its subsidiary A.J.D. Data Services Ltd. (“AJD”). This is an action commenced by Peter Darbyson (“Peter”) and Beverly Darbyson (“Beverly”) as against DLT and AJD. The action may be broken down into two broad components: (a) an oppression action in which Peter and Beverly seek damages in an undisclosed amount for defamation, damages for mental anxiety and distress and damages for fraud, conspiracy, conversion and unjust enrichment together with aggravated in punitive damages, also in an undisclosed amount. In addition, Peter and Beverly seek certain relief pursuant to Business Corporations Acts of both Ontario and Canada; (b) a wrongful dismissal action in which Peter (but not Beverly) seeks $650,000 damages for wrongful termination breach of contract and related matters. Peter made an assignment in bankruptcy in January 2019. Thus, any claim by him was automatically stayed. Also, the oppression action arises as a result of an Agreement and Plan of Reorganization between the parties which contain a jurisdiction clause whereby any issues arising out of the agreement are to be governed by and in the jurisdiction of the state of West Virginia, USA. DLT and AJD have advised Peter and Beverly that they intend to move to have the oppression action stayed as a result of the jurisdiction clause. In response, Peter and Beverly initially advised that they were prepared to abandon the oppression portions of the claim and proceed only on Peter’s wrongful dismissal portion of the claim. Unfortunately – for them – this was prior to the bankruptcy of Peter. In the end result, Peter’s action in its entirety was stayed and Beverly’s action very well be stayed should she wish to proceed further. As at September 05, 2019, the parties to the litigation have agreed to a settlement in principal. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2018 | |
Intangible assets | |
Note 16 - Intangible assets | The Company capitalizes software development costs in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 985-20. Non-compete, customer relationships, website and the domain and trade name are capitalized after useful lives based on prior experience in the telecom industry. Gross capitalized intangible assets totaled $549,226. Related amortization expense, included in general and administrative expenses, totaled $88,735 and $3,056 for the years ended December 31, 2018 and 2017, respectively. Estimated future amortization expense totals as follows: Year ended December 31, 2019 $ 104,418 2020 101,362 2021 64,751 2022 64,751 2023 64,751 2024 64,751 Thereafter 16,275 Total $ 481,059 |
Accrued liabilities and payable
Accrued liabilities and payables | 12 Months Ended |
Dec. 31, 2018 | |
Accrued liabilities and payables | |
Note 17 - Accrued liabilities and payables | During the year ended December 31, 2018, the Company has written back the Accounts payable of $9,072 due to statute of limitation. Further, accrued liabilities of the Company as at December 31, 2018 include a HST / GST liability of $10,402 relating to DLT Resolution Corp. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events | |
Note 18 - Subsequent Events | On January 14, 2019 DLT Resolution Inc. (”The Company”) sold 70 of the 80 shares it purchased in A.J.D. Data Services Ltd. on January 21, 2018. On closing The Company received a $329,815 (CAD 450,000) 3 year note with monthly payments throughout the term of the note. The Company will continue to hold a 10% interest in AJD Data. Till date the Company has not received principal payment as per the agreed payment schedule of the said note receivable. On March 29, 2019, DLT Resolution Corp. and DLT Resolution Inc. was served with a Statement of Claim ats 300-306 Town Centre Boulevard Limited Partnership/Court File No. CV-19-00617228-000 (Toronto) for unpaid rent and lost revenue related to the premises. In this action, the Plaintiff has claimed damages against the Defendants DLT Resolution Corp. and DLT Resolution Inc. in the amount of $567,385.13 for an alleged breach of lease. The Plaintiff has claimed damages against the Defendant DLT Resolution Inc. in the amount of $567,385.13 for allegedly wrongfully inducing a breach of lease and tortious interference with contractual relations. The Plaintiff has further claimed damages against the Defendant DLT Resolution Inc. in the amount of $567,385.13 for allegedly oppressive conduct under the Ontario Business Corporations Act. The Plaintiff has further claimed compensation for its legal costs and for pre-judgment interest. The Company filed a statement of Defense citing, amongst other things, that it has never entered into any agreement with the landlord, nor guaranteed any such liability. The Defendants DLT Resolution Corp. and DLT Resolution Inc. intend to contest the claim vigorously. There is no intention to make a settlement offer nor have instructions been received to make a settlement offer at this juncture. Since the statement of defense was delivered on 16 May 2019, the Company had no further communication from counsel for the Plaintiff nor have any steps been taken to move the litigation forward. Although there can be no assurance of the Company’s ability to dismiss the claim, management feels the claim is without merit and is confident it will receive a ruling in its favor. On February 28, 2019, the Company received a Subscription for 50,000 CDN. On March 29, 2019, the Company received a loan from a shareholder for 25,000 USD |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies (Policies) | |
Estimates | The preparation of financial statements in conformity with 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. Actual results could differ from those estimates. |
Cash | For the Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents. |
Income taxes | Income taxes are provided for using the liability method of accounting in accordance with FASB ASC Topic 740 (formally SFAS No. 109 “Accounting for Income Taxes”). A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment. At December 31, 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 provide an allowance for doubtful accounts based on estimated collections of outstanding amounts. |
Revenue Recognition | The Company follows ASC 606 of the FASB Accounting Standards Codification During the year ended December 31, 2018, the Company generated revenues from the sale of general information technology services focused on telephone system set up. The Company generated revenues of $227,343 and $2,423 during the years ended December 31, 2018 and 2017, respectively. The increase in revenue is the result of the Company’s acquisitions of 1922861 Ontario Inc. |
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 which range from five to seven 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 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. |
Reclassification of Prior Year Presentation | Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassification had no effect on the reported results of operation. |
Share Based Expenses | The Company complies with FASB ASC Topic 718 Compensation—Stock Compensation, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that is based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. FASB ASC Topic 718 primarily focuses on accounting for transactions in which an entity obtains employee services in share-based payment transactions. This statement requires a public entity to expense the cost of employee services received in exchange for an award of equity instruments. This statement also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. |
Net Income (Loss) Per Share | Net loss per share is calculated in accordance with FASB ASC topic 260.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 December 31, 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 December 31, 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, 2018 there is a potential earn out of an additional 500,000 restricted common shares of stock from the acquisition of 1922861 Ontario Inc (see 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 0.732902 and 0.774954 in effect at the balance sheet dates of December 31, 2018 and December 31, 2017, respectively. Statements of operations amounts have been translated using the annual weighted average exchange rates of 0.772077 for the year ended December 31, 2018. 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 was $3,992 currency transaction losses recognized during the periods presented. |
Fair Value of Financial Instruments | Fair value of certain of the Company’s financial instruments including cash, prepaid expenses, accounts payable, accrued expenses, notes payable, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments. Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk. Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values. Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income. |
Recently Issued Accounting Pronouncements | In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification,” In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” In November 2016, the FASB issued ASU 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash In October 2016, the FASB issued ASU 2016-16, “ Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-02, Income Statement Reporting, Comprehensive Income (Topic 220) Management believes recently issued accounting pronouncements will have no impact on the financial statements of the Company. |
Acquisition of AJD Data Service
Acquisition of AJD Data Services (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Acquisition of A.J.D. Data Services [Member] | |
Schedule of estimated fair values assets acquired and liabilities | ASSETS ACQUIRED Cash $ 302 Accounts receivable 37,590 Equipment 22,743 Customer relationships 201,759 Software 156,124 Non-compete agreement 172,136 Domain name 6,405 Goodwill 654,389 TOTAL ASSETS ACQUIRED $ 1,251,448 LIABILITIES ASSUMED Accounts payable 49,380 Related party payable 317 TOTAL LIABILITIES ASSUMED 49,697 Non-controlling interest 240,190 NET ASSETS ACQUIRED $ 961,561 |
Acquisition of 1922861 Ontari_2
Acquisition of 1922861 Ontario Inc (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Acquisition of 1922861 Ontario Inc. [Member] | |
Schedule of estimated fair values assets acquired and liabilities | ASSETS ACQUIRED $ Accounts receivable 18,663 Customer list 103,255 Developed technology 321,679 Domain and trade name 3,971 Non-compete 37,330 Goodwill 169,896 TOTAL ASSETS ACQUIRED $ 654,794 LIABILITIES ASSUMED Accounts payable 22,197 HST payable 2,147 TOTAL LIABILITIES ASSUMED 24,344 NET ASSETS ACQUIRED $ 630,450 |
Pro-Forma Financials for Acqu_2
Pro-Forma Financials for Acquisitions in 2018 (combined 1922861 Ontario Inc and A.J.D. Data Services) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Pro-Forma Financials for Acquisitions in 2018 (combined 1922861 Ontario Inc and A.J.D. Data Services) (Tables) | |
Schedule of condensed financial statements | Year ended December 31, 2018 2017 Revenue $ 953,430 $ 2,423 Cost of revenue 144,210 379 Gross margin 809,220 2,044 Operating expenses General and administrative 968,845 14,369 Professional fees 235,328 24,351 Total operating expenses 1,204,172 38,720 Income (loss) from operations (394,951 ) (36,676 ) Other income (expense) Other income 32,204 26,306 Gain/(loss) on change in fair market value of derivative liability (2,427 ) (14,980 ) Foreign exchange gain/(loss) (3,992 ) - Interest expense (4,767 ) (19,337 ) Total other income (expense) 21,018 (8,011 ) Net loss $ (373,933 ) $ (44,687 ) Preferred stock dividends declared $ - $ (1,249 ) Net income (loss) $ (373,933 ) $ (45,936 ) Net loss per common share, basic and diluted $ (0.02 ) $ (0.00 ) Weighted average basic shares outstanding 19,263,408 18,571,882 Weighted average diluted shares outstanding 19,263,408 18,571,882 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of deferred tax assets and liabilities | December 31, 2018 December 31, 2017 Net operating loss carry forward $ 1,172,000 $ 828,000 Applicable Canadian Federal and Provincial tax rates 26.5 % 26.5 % Deferred tax asset related to net operating losses 317,000 219,000 Deferred tax asset relating to debt discounts and derivative liability (at 26.55) (5,000 ) 5,000 Valuation allowance (312,000 ) (224,000 ) Net deferred tax asset $ - $ - |
Schedule of effective income tax rate reconciliation | December 31, 2018 (21%) December 31, 2017 (35%) Tax benefit at United States Federal statutory rate $ 27,000 $ 16,000 Differences in U.S. and Canadian tax rates on provision 7,000 (5,000 ) Increase in valuation allowance (34,000 ) (11,000 ) Income tax provision $ - $ - |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations (Tables) | |
Schedule of disposal groups including discontinued operations income statement balance sheet and additional disclosures | Assets from Discontinued Operations: December 31, 2018 Cash 30,954 Accounts receivable 166,134 Allowance for doubtful accounts (141,280 ) Equipment, net of accumulated depreciation 17,678 Intangible assets, net of accumulated amortization 394,041 Goodwill 189,208 Total assets from discontinued operations $ 656,735 Liabilities from Discontinued Operations: Accounts payable and accrued liabilities 144,185 Related party payables 1,942 Total liabilities from discontinued operations $ 146,127 |
Schedule of discontinued operations disclosures | Net loss from discontinued operations December 31, 2018 Net sales $ 554,351 Cost of sales - Gross profit 554,351 Operating expenses General and administrative 700,472 Professional fees 74,494 Total operating expenses 774,966 Other income (expense) Interest expense (20 ) Interest income 370 Loss on discontinued operations 103,116 Total other income (expense) 103,466 Net loss from discontinued operations $ (117,148 ) |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible assets | |
Schedule of finite lived intangible assets future amortization expense | Year ended December 31, 2019 $ 104,418 2020 101,362 2021 64,751 2022 64,751 2023 64,751 2024 64,751 Thereafter 16,275 Total $ 481,059 |
Nature of Business (Details Nar
Nature of Business (Details Narrative) | 12 Months Ended |
Dec. 31, 2018 | |
Nature of Business (Details Narrative) | |
State Country Name | Nevada |
Date of Incorporation | Jan. 17, 2007 |
Significant Accounting Polici_3
Significant Accounting Policies (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Apr. 12, 2018shares | |
Revenues | $ | $ 227,343 | $ 2,423 | |
Restricted common shares issued | 500,000 | ||
Weighted average exchange rates | 0.772077 | ||
Foreign currency translation exchange rate | 0.732902 | 0.774954 | |
Foreign currency translation losses recognized | $ | $ (3,992) | ||
Shares reserved for future issuance | 500,000 | ||
Acquisition of 1922861 Ontario Inc. [Member] | |||
Restricted common shares earn out | 500,000 | ||
Series A Convertible Preferred Stock | |||
Preferred stock; shares issued | 0 | 25,000 | |
Preferred stock; shares outstanding | 0 | 25,000 | |
Series A Convertible Preferred Stock | Convertible note [Member] | |||
Shares reserved for future issuance | 0 | 25,000 | |
Series B Convertible Preferred Stock [Member] | |||
Preferred stock; shares issued | 64,000 | 64,000 | |
Preferred stock; shares outstanding | 64,000 | 64,000 | |
Series B Convertible Preferred Stock [Member] | Convertible note [Member] | |||
Shares reserved for future issuance | 12,800 | 12,800 | |
Minimum [Member] | |||
Intangible asset, useful life | 5 years | ||
Maximum [Member] | |||
Intangible asset, useful life | 7 years |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Going Concern (Details Narrative) | ||
Provision for doubtful debt | $ 329,815 | |
Accumulated deficit | $ (3,595,912) | $ (3,394,701) |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018CAD ($) | |
Related party expenses | $ 6,748 | $ 6,849 | |
Related party payables | 17,713 | 44,679 | |
Accounts payable, related party | 40,000 | 55,000 | |
Payments to related party | (17,713) | (44,679) | |
Interest payable, related party | $ 26,875 | 19,545 | |
Accrues interest rate | 9.00% | 9.00% | |
Accrued interest expense | $ (4,767) | (19,337) | |
Notes payable, related party | 5,000 | 5,000 | |
Proceeds from related party debt | 7,924 | ||
DLT Resolution Corp [Member] | |||
Payments to related party | (33,691) | ||
Gilles Trahan [Member] | |||
Accounts payable, related party | 40,000 | 55,000 | |
Proceeds from related party debt | 3,496 | 3,496 | |
Gilles Trahan [Member] | DLT Resolution Corp [Member] | |||
Payments to related party | (33,691) | ||
Venecia Gafter [Member] | |||
Proceeds from related party debt | 3,252 | 3,252 | |
One Related Company [Member] | One Note Payable [Member] | |||
Notes payable, related party | $ 81,500 | 81,500 | |
Peter Darbyson [Member] | |||
Related party receivable | $ 45,337 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2014 | |
Treasury stock shares | 3,815,000 | 3,815,000 | |
Conversion of series A preferred shares to common shares | 25,000 | ||
Exchange and rescission shares of common stock | 25,000 | ||
Common shares issued | 745,778 | ||
Dividends payable | $ 26,697 | ||
Common stock, shares authorized | 275,000,000 | 275,000,000 | |
Common stock, shares issued | 24,982,537 | 21,572,871 | |
Common stock, shares outstanding | 21,167,537 | 17,757,871 | |
Common stock par value | $ 0.001 | $ 0.001 | |
Proceeds from the sale of common stock | $ 236,000 | ||
Related party note payable entered into for purchase of treasury stock | $ (100) | ||
Outstanding common shares of treasury stock | 3,777,000 | ||
Notes payable, net of current portion | $ 5,000 | ||
Common shares issued for acquisition of AJD Data Services, Shares | 1,575,000 | ||
Common shares issued for acquisition of AJD Data Services, Value | $ 360,729 | ||
Common shares issued for acquisition of 1922861 Ontario Inc, Shares | 100,000 | ||
Common shares issued for acquisition of 1922861 Ontario Inc, Value | $ 417,815 | ||
Common shares issued in exchange for preferred shares | 25,000 | ||
Common shares, reverse stock splits | 63,888 | ||
Treasury stock, 3,815,000 shares | $ (5,300) | $ (5,300) | |
Series A Convertible Preferred Stock | |||
Common shares issued in exchange for preferred shares | 25,000 | ||
Convertible Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Convertible Preferred stock, per share | $ 0.01 | ||
Convertible Preferred stock, shares issued | 0 | 25,000 | |
Convertible Preferred stock, shares outstanding | 0 | 25,000 | |
Series B Convertible Preferred Stock [Member] | |||
Convertible Preferred stock, shares authorized | 500,000 | 500,000 | |
Convertible Preferred stock, per share | $ 0.20 | ||
Convertible Preferred stock, shares issued | 64,000 | 64,000 | |
Convertible Preferred stock, shares outstanding | 64,000 | 64,000 | |
Former officer [Member] | |||
Treasury stock shares | 38,000 | ||
Former officer [Member] | |||
Treasury stock, 3,815,000 shares | $ 100 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Aug. 01, 2017 | Jan. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 |
Current notes payable, related party | $ 81,500 | $ 81,500 | ||||
Interest payable, related party | 26,875 | 19,545 | ||||
Notes payable, related party, net of current portion | $ 5,000 | $ 5,000 | ||||
Related party note due date | Jul. 1, 2019 | |||||
Notes Payable [Member] | ||||||
Consulting services amount | $ 350,000 | |||||
Interest rate | 9.00% | |||||
Debt due date | Nov. 19, 2016 | |||||
Series A Preferred Stock [Member] | ||||||
Preferred stock share isssued in exchange of note payable | 50,000 | |||||
Preferred stock issued for repayment of accrued interest payable | $ 31,500 | |||||
Preferred stock issued for repayment of note payable | $ 18,500 | |||||
Common Stock [Member] | ||||||
Common shares issued in exchange for note payable principal, Shares | 1,250,000 | |||||
Common shares issued in exchange for note payable principal, Amount | $ 250,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 22, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accrued interest | $ 0 | $ 3,048 | |
Outstanding liability forgiven by the holder | 2,679 | ||
Convertible notes payable | 0 | 4,900 | |
Interest payable | 26,875 | $ 19,545 | |
Convertible Notes Payable [Member] | |||
Convertible notes payable | $ 4,900 | ||
Interest rate | 10.00% | ||
Debt instrument Convertible conversion description | The note carried interest at 10% per annum, was due on demand and was convertible at the option of the holder into common stock of the Company at a rate equal to the lesser of a 50% discount from the last trade price of the stock | ||
Convertible Notes Payable [Member] | May 2018 [Member] | |||
Convertible notes payable | 4,900 | ||
Convertible notes payable settled amount | 5,390 | ||
Interest payable | 490 | ||
Interest expense forgiven by the holder | 120 | ||
Accrued interest forgiven by the holder | $ 2,559 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 22, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative liability | $ 20,328 | |||||
Convertible note payable | 0 | 4,900 | ||||
Amortization expense | 4,900 | |||||
Loss on change in fair market value of derivative liability | $ (63,445) | $ 2,427 | $ 14,980 | |||
Risk free interest rate | 2.13% | |||||
Expected lives | 6 months | |||||
Expected volatility | 338.00% | |||||
Convertible Notes Payable [Member] | ||||||
Derivative liability | 5,348 | |||||
Convertible note payable | $ 4,900 | |||||
Interest rate | 10.00% | |||||
Convertible note payable derivative fair value written off | $ 22,775 | |||||
Debt instrument convertible note conversion description | The note carried interest at 10% per annum, was due on demand and was convertible at the option of the holder into common stock of the Company at a rate equal to the lesser of a 50% discount from the last trade price of the stock | |||||
Excess fair market value of derivative liability charged to expenses | $ 448 | |||||
Debt discount | $ 4,900 |
Acquisition of A.J.D. Data Se_2
Acquisition of A.J.D. Data Services (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
LIABILITIES ASSUMED | ||
Accounts receivable | $ 12,217 | |
Goodwill | 169,896 | |
TOTAL ASSETS ACQUIRED | 654,794 | |
Related party payables | 17,713 | $ 44,679 |
TOTAL LIABILITIES ASSUMED | 24,344 | |
AJD [Member] | ||
LIABILITIES ASSUMED | ||
Cash | 302 | |
Accounts receivable | 37,590 | |
Equipment | 22,743 | |
Customer relationships | 201,759 | |
Software | 156,124 | |
Non-compete agreement | 172,136 | |
Domain name | 6,405 | |
Goodwill | 654,389 | |
TOTAL ASSETS ACQUIRED | 1,251,448 | |
Accounts payable | 49,380 | |
Related party payables | 317 | |
TOTAL LIABILITIES ASSUMED | 49,697 | |
Non-controlling interest | 240,190 | |
NET ASSETS ACQUIRED | $ 961,945 |
Acquisition of A.J.D. Data Se_3
Acquisition of A.J.D. Data Services (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Jan. 21, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 12, 2018 | |
Estimated fair value of common stock | $ 600,880 | ||||
Restricted common shares issued | 500,000 | ||||
Common stock shares issued | 24,982,537 | 21,572,871 | |||
Common stock value | $ 24,983 | $ 21,573 | |||
Total revenues | 227,343 | $ 2,423 | |||
Conditional issuance of common stock shares reserve for future issuance | 500,000 | ||||
First milestone [Member] | |||||
Restricted common shares issued | 1,050,000 | ||||
AJD [Member] | |||||
Restricted common shares issued | 525,000 | ||||
Restricted common shares, value | 120,195 | ||||
Accrued revenue | $ 37,085 | ||||
Non-controlling interest | 240,190 | ||||
Total revenues | $ 554,351 | ||||
Conditional issuance of common stock shares reserve for future issuance | 3,675,000 | ||||
Purchase Agreement [Member] | |||||
Estimated fair value of common stock | $ 212,520 | ||||
Additional share issued of common stock | 3,675,000 | ||||
Common stock fair value | $ 841,366 | ||||
Common stock shares issued | 1,000,000 | ||||
Common stock value | $ 417,815 | ||||
Additional share issued of common stock | 3,675,000 | ||||
Common stock shares issued, value | $ 240,390 | ||||
Intangible assets useful life | 5 years | ||||
Stock Purchase Agreement [Member] | |||||
Business acquisition, shares to be acquired under agreement | 80 | ||||
Business acquisition, ownership interest to be acquired under agreement | 80.00% | ||||
Condition Two [Member] | AJD [Member] | |||||
Conditional issuance of common stock shares reserve for future issuance | 525,000 | ||||
Gross sales | $ 2,000,000 | ||||
Pre tax earnings | $ 150,000 | ||||
Restricted common shares exchange description | 525,000 Shares upon A.J.D Data Services reaching $2,000,000 in cumulated gross sales with $150,000 in pre-tax earnings | ||||
Condition [Member] | AJD [Member] | |||||
Conditional issuance of common stock shares reserve for future issuance | 1,050,000 | ||||
Gross sales | $ 1,000,000 | ||||
Restricted common shares exchange description | 1,050,000 Shares upon A.J.D Data Services reaching $1,000,000 in cumulated gross sales | ||||
Condition One [Member] | AJD [Member] | |||||
Conditional issuance of common stock shares reserve for future issuance | 525,000 | ||||
Gross sales | $ 1,500,000 | ||||
Pre tax earnings | $ 100,000 | ||||
Restricted common shares exchange description | 525,000 Shares upon A.J.D Data Services reaching $1,500,000 in cumulated gross sales with $100,000 in pre-tax earnings | ||||
Condition Three [Member] | AJD [Member] | |||||
Conditional issuance of common stock shares reserve for future issuance | 525,000 | ||||
Gross sales | $ 2,500,000 | ||||
Pre tax earnings | $ 200,000 | ||||
Restricted common shares exchange description | 525,000 Shares upon A.J.D Data Services reaching $2,500,000 in cumulated gross sales with $200,000 in pre-tax earnings |
Acquisition of 1922861 Ontari_3
Acquisition of 1922861 Ontario Inc (Details) | Dec. 31, 2018USD ($) |
Acquisition of 1922861 Ontario Inc (Details) | |
Accounts receivable | $ 18,663 |
Customer list | 103,255 |
Developed technology | 321,679 |
Domain and trade name | 3,971 |
Non-compete | 37,330 |
Goodwill | 189,208 |
TOTAL ASSETS ACQUIRED | 654,794 |
LIABILITIES ASSUMED | |
Accounts payable | 22,197 |
HST payable | 2,147 |
TOTAL LIABILITIES ASSUMED | 24,344 |
NET ASSETS ACQUIRED | $ 630,450 |
Acquisition of 1922861 Ontari_4
Acquisition of 1922861 Ontario Inc. (Details Narrative) - USD ($) | Apr. 12, 2018 | Sep. 30, 2018 | Sep. 21, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Restricted common shares issued, shares | 500,000 | ||||
Conditional issuance of common stock shares reserve for future issuance, shares | 500,000 | ||||
Conditional issuance of common stock shares reserve for future issuance, value | $ 196,142 | ||||
Business acquisition description | In addition to the consideration on closing, an additional 500,000 restricted common shares may potentially be issued upon meeting the following milestone | ||||
Common stock value | $ 24,983 | $ 21,573 | |||
Estimated fair value of common stock | 600,880 | ||||
Purchase Agreement [Member] | |||||
Additional share issued of common stock | 3,675,000 | ||||
Common stock value | 417,815 | ||||
Estimated fair value of common stock | $ 212,520 | ||||
Acquisition [Member] | |||||
Conditional issuance of common stock shares reserve for future issuance, shares | 500,000 | ||||
Monthly sales | $ 500,000 | ||||
Pre-tax profit, percentages | 10.00% | ||||
First milestone [Member] | |||||
Restricted common shares issued, shares | 1,050,000 | ||||
Asset Purchase Agreement [Member] | |||||
Restricted common shares issued, shares | 500,000 | ||||
Restricted common shares issued, value | $ 12,520 | ||||
Monthly sales | $ 19,200 | ||||
Asset Purchase Agreement [Member] | First milestone [Member] | |||||
Restricted common shares issued, shares | 500,000 | ||||
Restricted common shares issued, value | $ 205,295 |
Pro-Forma Financials for Acqu_3
Pro-Forma Financials for Acquisitions in 2018 (combined 1922861 Ontario Inc and A.J.D. Data Services) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total revenues | $ 227,343 | $ 2,423 |
Cost of revenue | 108,401 | 379 |
Gross margin | 118,942 | 2,044 |
General and administrative | 205,109 | 14,369 |
Professional fees | 146,615 | 24,351 |
Total operating expenses | 351,724 | 38,720 |
Income (loss) from operations | (232,782) | (36,676) |
Other income (expense) | ||
Other income | 31,834 | 26,306 |
Gain/(loss) on change in fair market value of derivative liability | (2,427) | (14,980) |
Foreign exchange gain/(loss) | (3,992) | |
Interest expense | (4,767) | (19,337) |
Total other income (expense) | 20,648 | (8,011) |
Net loss | (212,134) | (44,687) |
Preferred stock dividends declared | 1,249 | |
Net Income (Loss) | $ (329,282) | $ (44,687) |
Net Loss per common share, basic and diluted | $ (0.01) | $ 0 |
Weighted average basic shares outstanding | 19,263,408 | 18,571,882 |
Weighted average diluted shares outstanding | 19,263,408 | 18,571,882 |
1922861 Ontario Inc and A.J.D. Data Services [Member] | ||
Total revenues | $ 953,430 | $ 2,423 |
Cost of revenue | 144,210 | 379 |
Gross margin | 809,220 | 2,044 |
General and administrative | 968,845 | 14,369 |
Professional fees | 235,328 | 24,351 |
Total operating expenses | 1,204,172 | 38,720 |
Income (loss) from operations | (394,951) | (36,676) |
Other income (expense) | ||
Other income | 32,204 | 26,306 |
Gain/(loss) on change in fair market value of derivative liability | (2,427) | (14,980) |
Foreign exchange gain/(loss) | (3,992) | |
Interest expense | (4,767) | (19,337) |
Total other income (expense) | 21,018 | (8,011) |
Net loss | (373,933) | (44,687) |
Preferred stock dividends declared | 1,249 | |
Net Income (Loss) | $ (373,933) | $ (45,936) |
Net Loss per common share, basic and diluted | $ (0.02) | $ 0 |
Weighted average basic shares outstanding | 19,263,408 | 18,571,882 |
Weighted average diluted shares outstanding | 19,263,408 | 18,571,882 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Taxes | ||
Net operating loss carry forward | $ 1,172,000 | $ 828,000 |
Valuation allowance | (312,000) | (224,000) |
Deferred tax asset relating to debt discounts and derivative liability (at 26.55) | (5,000) | 5,000 |
Deferred tax asset related to net operating losses | $ 317,000 | $ 219,000 |
Applicable Canadian Federal and Provincial tax rates | 26.50% | 26.50% |
Net deferred tax asset |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | ||
Tax benefit at United States Federal statutory rate | $ 27,000 | $ 16,000 |
Differences in U.S. and Canadian tax rates on provision | 7,000 | (5,000) |
Increase in valuation allowance | (34,000) | (11,000) |
Income tax provision |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Federal statutory rate | 21.00% | 35.00% |
Net operating loss carry forwards, expiration date | 2026 | |
Maximum [Member] | ||
Reduction in corporate tax rate | 21.00% |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts receivable | $ 12,217 | |
Goodwill | 169,896 | |
Discontinued Operations [Member] | ||
Cash | 30,954 | |
Accounts receivable | 166,134 | |
Allowance for doubtful accounts | (141,280) | |
Equipment, net of accumulated depreciation | 17,678 | |
Intangible assets, net of accumulated amortization | 394,041 | |
Goodwill | 189,208 | |
Total assets from discontinued operations | 656,735 | |
Liabilities from Discontinued Operations: | ||
Accounts payable and accrued liabilities | 144,185 | |
Related party payables | 1,942 | |
Total liabilities from discontinued operations | $ 146,127 |
Discontinued Operations (Deta_2
Discontinued Operations (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net loss from discontinued operations | ||
Total revenues | $ 227,343 | $ 2,423 |
Cost of sales | 108,401 | 379 |
Gross profit | 118,942 | 2,044 |
General and administrative | 205,109 | 14,369 |
Professional fees | 146,615 | 24,351 |
Total operating expenses | 351,724 | 38,720 |
Other income (expense) | ||
Interest expense | (4,767) | (19,337) |
Total other income (expense) | 20,648 | (8,011) |
Net loss from discontinued operations | (117,148) | |
Discontinued Operations [Member] | ||
Net loss from discontinued operations | ||
Total revenues | 554,351 | |
Cost of sales | ||
Gross profit | 554,351 | |
General and administrative | 700,472 | |
Professional fees | 74,494 | |
Total operating expenses | 774,966 | |
Other income (expense) | ||
Interest expense | (20) | |
Interest income | 370 | |
Loss on discontinued operations | 103,116 | |
Net loss from discontinued operations | $ (117,148) |
Discontinued Operations (Deta_3
Discontinued Operations (Details Narrative) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Discontinued Operations (Details Narrative) | |
Interest rate | 10.00% |
Note receivable | $ 329,815 |
Accounts payable and accrued liabilities | 42,807 |
Payroll tax liability | $ 76,761 |
Concentrations of Revenue (Deta
Concentrations of Revenue (Details Narrative) | 12 Months Ended |
Dec. 31, 2018integer | |
Concentrations of Revenue (Details Narrative) | |
Concentrations revenue percentages | 23.00% |
Number of customers | 5 |
Commitments and contingencies (
Commitments and contingencies (Details Narrative) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and contingencies (Details Narrative) | |
Statement of claim description | The action may be broken down into two broad components: (a) an oppression action in which Peter and Beverly seek damages in an undisclosed amount for defamation, damages for mental anxiety and distress and damages for fraud, conspiracy, conversion and unjust enrichment together with aggravated in punitive damages, also in an undisclosed amount. In addition, Peter and Beverly seek certain relief pursuant to Business Corporations Acts of both Ontario and Canada; (b) a wrongful dismissal action in which Peter (but not Beverly) seeks $650,000 damages for wrongful termination breach of contract and related matters. |
Intangible Assets (Details)
Intangible Assets (Details) | Dec. 31, 2018USD ($) |
Intangible Assets (Details) | |
2019 | $ 104,418 |
Accounts payable and accrued liabilities | 42,807 |
2020 | 101,362 |
2021 | 64,751 |
2022 | 64,751 |
2023 | 64,751 |
2024 | 64,751 |
Thereafter | 16,275 |
Total | $ 481,059 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets (Details) | ||
Gross capitalized intangible assets | $ 549,226 | |
Amortization expense | $ 88,142 | $ 3,056 |
Accruedliabilities and payables
Accruedliabilities and payables (Details Narrative) | Dec. 31, 2018USD ($) |
Accruedliabilities and payables (Details Narrative) | |
Accounts payable | $ 9,072 |
Accrued liabilities include HST / GST liability | $ 10,402 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jan. 14, 2019 | Mar. 29, 2019 | Dec. 31, 2018 |
Interest rate | 10.00% | ||
Subsequent Event [Member] | Restricted Stock [Member] | |||
Common stock shares sold | 70 | ||
Interest rate | 10.00% | ||
Damages against the Defendants | $ 56,738,513 | ||
Proceeds from sale of common stock | $ 329,815 | ||
Loan from shareholder | $ 25,000 |