Document and Entity Information
Document and Entity Information - USD ($) | Jun. 30, 2018 | Dec. 31, 2018 | Apr. 15, 2019 |
Details | |||
Registrant Name | ASTRO AEROSPACE LTD. | ||
Registrant CIK | 0001425203 | ||
SEC Form | 10-K | ||
Period End date | Dec. 31, 2018 | ||
Fiscal Year End | --12-31 | ||
Trading Symbol | ASDN | ||
Tax Identification Number (TIN) | 980557091 | ||
Number of common stock shares outstanding | 70,081,444 | ||
Public Float | $ 33,747,415.86 | ||
Filer Category | Smaller Reporting Company | ||
Current with reporting | Yes | ||
Voluntary filer | Yes | ||
Well-known Seasoned Issuer | No | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, State Country Name | Nevada | ||
Entity Address, Address Line One | 320 W Main Street | ||
Entity Address, City or Town | Lewisville | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 75057 | ||
City Area Code | 972 | ||
Local Phone Number | 221-1199 | ||
Entity Listing, Par Value Per Share | $ 0.001 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash | $ 55,129 | $ 0 |
Prepaid Expense and Other Assets, Current | 19,190 | 0 |
Assets, Current | 106,976 | 1,699,633 |
Assets | 992,175 | 1,699,633 |
Other Receivables | 32,657 | 0 |
Assets held as Discontinued Operations | 0 | 1,699,633 |
Deferred Tax Assets, in Process Research and Development | 871,000 | 0 |
Deposits Assets, Noncurrent | 14,199 | 0 |
Liabilities, Current | ||
Accounts Payable and Other Accrued Liabilities, Current | 93,952 | 0 |
8% Senior Secured Convertible Promissory Note, net of discounts of $592,932 | 108,886 | 0 |
Liabilities, Current | 202,838 | 984,483 |
Liabilities, Noncurrent | ||
Liabilities | 794,277 | 984,483 |
Stockholders' Equity Attributable to Parent | ||
Preferred Stock, Value, Outstanding | 156 | 156 |
Series B Preferred Stock Value Outstanding | 10 | 0 |
Common Stock, Value, Outstanding | 69,309 | 82,939 |
Retained Earnings (Accumulated Deficit) | (8,011,802) | 277,467 |
Stockholders' Equity Attributable to Parent | 197,898 | 715,150 |
Liabilities and Equity | 992,175 | 1,699,633 |
Liabilities held as Discontinued Operations | 0 | 984,483 |
Promissory Note from Parent | 591,439 | 0 |
Additional Paid in Capital, Preferred Stock | 124,844 | 124,844 |
Additional Paid in Capital, Series B Preferred Stock | 7,156,204 | 0 |
Common Stock | 836,473 | 229,744 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 22,704 | $ 0 |
Consolidated Balance Sheets - P
Consolidated Balance Sheets - Parenthetical - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Details | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | |
Preferred Stock, Shares Authorized | 50,000,000 | |
Preferred Stock, Shares Outstanding | 1,562,500 | |
Series B Preferred Stock Par or Stated Value Per Share | $ 0.001 | |
Series B Preferred Stock Shares Authorized | 10,000 | |
Series B Preferred Stock Shares Outstanding | 0 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | |
Common Stock, Shares Authorized | 250,000,000 | |
Common Stock, Shares, Outstanding | 69,308,946 | 82,938,960 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Revenues | $ 0 | $ 0 |
Marketing and Advertising Expense | 60,487 | 0 |
General and Administrative Expense | 188,789 | 0 |
Research and Development Expense | 901,857 | 0 |
Impairment Expense | 6,285,214 | 0 |
Costs and Expenses | 7,436,347 | 0 |
Income from Operations | (7,436,347) | 0 |
Other Income and Expenses | ||
Interest Expense | 318,038 | 0 |
Other Operating Income (Expense), Net | 331,185 | 0 |
Bank and Filing Fees | 23,147 | 0 |
Miscellaneous Income | (10,000) | 0 |
Income (Loss) from Continuing Operations before Income Taxes, Domestic | (7,767,532) | 0 |
Income Taxes Paid, Net | ||
Income Tax, Current | 0 | 0 |
Deferred Income Taxes and Tax Credits | 0 | 0 |
Income Taxes Paid, Net | 0 | 0 |
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | (7,767,532) | 0 |
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | 178,300 | (10,578) |
Income Tax Refunds, Discontinued Operations | 37,367 | (26,490) |
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 140,933 | 15,912 |
Net (Loss) Income | (7,626,599) | 15,912 |
Dividends, Preferred Stock | 10,000 | 10,000 |
Net Income (Loss) Available to Common Stockholders, Basic | $ (7,636,599) | $ 5,912 |
Net Loss From Continuing Operations per Common Share - Basic | $ (0.11) | $ 0 |
Net Loss From Continuing Operations per Common Share - Diluted | (0.11) | 0 |
Net Earnings From Discontinued Operations per Common Share - Basic | 0 | 0 |
Net Earnings From Discontinued Operations per Common Share - Diluted | 0 | 0 |
Earnings Per Share, Basic | (0.10) | 0 |
Earnings Per Share, Diluted | $ (0.10) | $ 0 |
Weighted Average Number of Shares Outstanding, Basic | 73,771,722 | 82,938,960 |
Weighted Average Number of Shares Outstanding, Basic | 73,771,722 | 85,540,812 |
Foreign Currency Translation Gain | $ 22,704 | $ 0 |
Comprehensive (Loss) Income | $ (7,603,895) | $ 15,912 |
Statements of changes in Stockh
Statements of changes in Stockholders' Equity (Deficit) - USD ($) | Common Stock | Preferred Stock Including Additional Paid in Capital | Additional Paid-in Capital | Comprehensive Income | Retained Earnings | Total | Series A Preferred Stock | Series B Preferred Stock |
Shares, Outstanding | 82,938,960 | 1,562,500 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2016 | $ 82,939 | $ 0 | $ 218,331 | $ 0 | $ 271,555 | $ 697,825 | $ 156 | $ 0 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2016 | 82,938,960 | 1,562,500 | ||||||
Preferred Stock Dividends | $ 0 | 0 | 0 | 0 | (10,000) | (10,000) | $ 0 | 0 |
Stock Option Expense | 0 | 0 | 11,413 | 0 | 0 | 11,413 | 0 | 0 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 0 | 0 | 0 | 0 | 15,912 | 15,912 | 0 | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2017 | $ 82,939 | 0 | 229,744 | 0 | 277,467 | 715,150 | $ 156 | 0 |
Shares, Outstanding, Ending Balance at Dec. 31, 2017 | 82,938,960 | 1,562,500 | ||||||
Shares, Outstanding | 82,938,960 | 1,562,500 | ||||||
Shares, Outstanding | 82,938,960 | 1,562,500 | ||||||
Stock Option Expense | $ 0 | 0 | 22,857 | 0 | 0 | 22,857 | $ 0 | 0 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 0 | 0 | 0 | 0 | (7,626,599) | (7,626,599) | 0 | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2018 | $ 69,309 | 7,156,204 | 836,473 | 22,704 | (8,011,802) | 197,898 | $ 156 | $ 10 |
Shares, Outstanding, Ending Balance at Dec. 31, 2018 | 69,308,946 | 1,562,500 | 10,000 | |||||
Issuance of 10% Convertible Promissory Notes | $ 0 | 0 | (50,000) | 0 | 0 | (50,000) | $ 0 | $ 0 |
Series A Preferred Stock Dividend | 0 | 0 | 0 | (2,500) | (2,500) | 0 | 0 | |
Acquisition of Common Stock for Common Stock of Subsidiaries | $ (13,669) | 0 | (202,601) | 0 | (660,170) | (876,440) | 0 | 0 |
Outstanding Common Shares | (13,668,900) | |||||||
Issuance of Series B Convertible Preferred Stock | $ 0 | 7,156,204 | 0 | 0 | 0 | 7,156,214 | $ 0 | $ 10 |
Shares, Outstanding | 82,938,960 | 1,562,500 | 10,000 | |||||
Conversion into common stock of the 10% convertible promissory notes with accrued interest | $ 0 | 0 | 52,534 | 0 | 0 | 52,534 | $ 0 | $ 0 |
Issuance of 10% Convertible Promissory Notes Conversion Shares | $ 39 | 0 | (39) | 0 | 0 | 0 | 0 | 0 |
Outstanding Common Shares | 38,886 | |||||||
Fair Value of Warrants Issued with 8% Senior Secured Convertible Promissory Note | $ 0 | 0 | 171,121 | 0 | 0 | 171,121 | 0 | 0 |
Fair Value of Beneficial Conversion Feature of the 8% Senior Secured Convertible Promissory Note | 0 | 0 | 523,326 | 0 | 0 | 523,326 | 0 | 0 |
Inducement Shares Issued for the 8% Senior Secured Convertible Promissory Note | 0 | 0 | $ 89,531 | 0 | $ 0 | 89,531 | 0 | 0 |
Foreign Currency Translation Gain | $ 0 | $ 0 | $ 22,704 | $ 22,704 | $ 0 | $ 0 | ||
Shares, Outstanding | 69,308,946 | 1,562,500 | 10,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net Cash Provided by (Used in) Operating Activities | ||
Net (Loss) Income | $ (7,626,599) | $ 15,912 |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities | ||
Impairment Expense | 6,285,214 | 0 |
Amortization of Note Discounts | 295,398 | 0 |
Increase (Decrease) in Operating Capital | ||
Increase (Decrease) in Accounts Payable and Accrued Liabilities | 96,452 | 0 |
Discontinued Operations, net | (358,355) | (38,782) |
Net Cash Provided by (Used in) Operating Activities | (1,373,936) | (22,870) |
Net Cash Provided by (Used in) Investing Activities | ||
Discontinued Investing Operations, net | 0 | (10,131) |
Net Cash Provided by (Used in) Investing Activities | 0 | (10,131) |
Net Cash Provided by (Used in) Financing Activities | ||
Promissory Note from Parent | 591,439 | 0 |
8% Senior Secured Convertible Promissory Note | 600,000 | 0 |
Discontinued Financing Operations, net | 0 | (179,641) |
Dividends, Preferred Stock, Cash | (2,500) | 0 |
Net Cash Provided by (Used in) Financing Activities | 1,188,939 | (179,641) |
Cash, Period Increase (Decrease) | (162,293) | (212,642) |
Other Receivables | (32,657) | 0 |
Prepaids | (19,190) | 0 |
Payments for Deposits | (14,199) | 0 |
Effect of Foreign Currency Translation Loss | 22,704 | 0 |
Cash and Cash Equivalents, at Carrying Value | 217,422 | 430,064 |
Cash and Cash Equivalents, at Carrying Value | 55,129 | 217,422 |
Interest Paid | 9,232 | 32,737 |
Income Taxes Paid | 24,930 | 34,000 |
Common Stock Received in Sale of Discontinued Operations | 876,440 | 0 |
Assets Sold in Discontinued Operations for Common Stock | 1,941,259 | 0 |
Liabilities Sold in Discontinued Operations for Common Stock | (1,064,818) | 0 |
Series B Preferred Stock Issued in Acquisition of Assets | 7,156,214 | 0 |
Acquired In-Process Research and Development | 7,181,214 | 0 |
Accounts Payable and Accrued Liabilities Assumed in Acquisition of Assets | 25,000 | 0 |
Conversion into Common Stock of the 10% Convertible Promissory Notes with Accrued Interest (unaudited) | 52,534 | 0 |
Discounts Issued with 8% Senior Secured Convertible Promissory Notes | 101,818 | 0 |
Allocation to Interest Expense from Debt Discount of the 8% Senior Secured Convertible Promissory Note | 163,978 | 0 |
Amortization to Interest Expense of the Debt Discount from the 8% Senior Secured Convertible Promissory Note | $ 108,886 | $ 0 |
NOTE 1 - NATURE OF OPERATIONS
NOTE 1 - NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
NOTE 1 - NATURE OF OPERATIONS | NOTE 1 – NATURE OF OPERATIONS Astro Aerospace Ltd. (“Astro” or the “Company”) and its wholly-owned subsidiaries, is a developer of self-piloted and autonomous, manned and unmanned, eVTOL (Electric Vertical Take Off and Landing) aerial vehicles. The Company intends to provide the market with a mainstream mode of everyday, aerial transportation for both humans and cargo. Astro currently has a working prototype and is making engineering and mechanical improvements to it. Astro is the successor corporation to CPSM, Inc., which through its subsidiaries, Custom Pool and Spa Mechanics, Inc. (“Custom Pool and Spa”), and Custom Pool Plastering, Inc. (“CPP”) collectively (“Custom Pool”) were primarily engaged in the provision of full line pool and spa services, specializing in pool maintenance and service, repairs, leak detection, renovations, decking and remodeling. The primary market area included Martin, Palm Beach, St Lucie, Indian River and Brevard counties, Florida. On March 14, 2018, MAAB Global Limited (“MAAB”), the majority stockholder and parent of Astro, acquired control of CPSM, Inc. and on April 30, 2018, Custom Pool was sold to the Lawrence & Loreen Calarco Family Trust, an entity controlled by Lawrence Calarco and Loreen Calarco, former officers and directors of the CPSM (See Note 2, “Sale of Common Stock of Majority Stockholders and Resignation and Election of the Board of Directors” and Note 3, “ Sale of Custom Pool”). On March 24, 2018 the articles of incorporation were amended to change the name of the Company from CPSM, Inc. to Astro Aerospace Ltd. As of December 31, 2018, the Company has one subsidiary, Astro Aerospace Ltd. (Canada), which is incorporated in Canada and is used mainly for refunds of the Goods and Services Tax in Canada. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of our business. As reflected in the accompanying consolidated financial statements, for the year ended December 31, 2018 the Company had a net loss of $(7,626,599) and used $(1,373,936) cash in operations, and at December 31, 2018, had negative working capital of $(95,862), current assets of $106,976, and an accumulated deficit of $(8,011,802). The foregoing factors raise substantial doubt about the Company’s ability to continue as a going concern. Ultimately, the ability to continue as a going concern is dependent upon the Company’s ability to attract significant new sources of capital, attain a reasonable threshold of operating efficiencies and achieve profitable operations by licensing or otherwise commercializing products incorporating the Company’s technologies. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company acknowledges that its current cash position is insufficient to maintain the current level of operations and research and development, and that the Company will be required to raise substantial additional capital to continue its operations and fund its future business plans. The Company has continued to raise funds through its parent, MAAB and the outstanding note payable balance was $591,439 and there is $158,561 available under the terms of the note at December 31, 2018. The Company has also raised funds through independent capital sources, of which the Company has a Senior Secured Convertible Promissory Note with an outstanding balance of $701,818 at December 31, 2018. Astro plans to raise additional capital in the private and public securities markets in 2019. |
SALE OF COMMON STOCK OF MAJORIT
SALE OF COMMON STOCK OF MAJORITY STOCKHOLDERS AND RESIGNATION AND ELECTION OF THE BOARD OF DIRECTORS | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
SALE OF COMMON STOCK OF MAJORITY STOCKHOLDERS AND RESIGNATION AND ELECTION OF THE BOARD OF DIRECTORS | NOTE 2 – SALE OF COMMON STOCK OF MAJORITY STOCKHOLDERS AND RESIGNATION AND ELECTION OF THE BOARD OF DIRECTORS On March 14, 2018, Lawrence and Loreen Calarco, officers and directors of the Company, the Lawrence & Loreen Calarco Family Trust and the Lawrence and Loreen Calarco Trust of June 3, 2014, majority stockholders controlled by Lawrence and Loreen Calarco, sold 51,711,571 common shares and 1,562,500 preferred shares to MAAB, a non-affiliate of the Company, paid from Bruce Bent, officer and director of MAAB’s personal funds resulting in a change of control of the Company. The stock was transferred to MAAB effective March 14, 2018. The 51,711,571 common shares and 1,562,500 preferred shares represented 62.35% and 100% of the issued and outstanding common and preferred stock of the Company. On March 14, 2018, Lawrence Calarco, Loreen Calarco and Charles Dargan II resigned as officers and directors of the Company. Additionally, on March 14, 2018, Jeffrey Michel and Randy Sofferman resigned as directors of the Company. On March 14, 2018, Bruce Bent, age 62, was appointed as Chief Executive Officer and Director of the Company. He will stand for re-election at the next annual meeting of the shareholders. There are no material arrangements to which Mr. Bent is a party, and there is no family relationship between him and any other party connected to the Company. |
SALE OF CUSTOM POOL
SALE OF CUSTOM POOL | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
SALE OF CUSTOM POOL | NOTE 3 – SALE OF CUSTOM POOL On April 30, 2018, pursuant to a Share Exchange Agreement dated April 16, 2018, the Company sold all of the issued and outstanding common shares of Custom Pool & Spa Mechanics, Inc. and Custom Pool Plastering, its wholly owned subsidiaries, for 13,668,900 common shares of the Company held by the Lawrence & Loreen Calarco Family Trust, an entity controlled by Lawrence Calarco and Loreen Calarco, former officers and directors of the Company. The Board of Directors subsequently authorized the cancellation of those common shares. After said cancellation, the total issued and outstanding common shares was 69,270,060. The Share Exchange Agreement was approved by the Board of Directors and written consent of shareholders holding 62.35% of the voting securities of the Company as of April 16, 2018. The Company determined that there would be no gain or loss on the sale in accordance with Accounting Standards Codification 505-30-10, “Equity – Nonreciprocal Transfers with Owners”. Essentially the transaction is similar to a spin-off or reorganization since the Company acquired shares of its own common stock for the common shares of Custom Pool & Spa Mechanics, Inc. and Custom Pool Plastering, its wholly owned subsidiaries. As such, the transaction is accounted for at the recorded (book value) amount. The book value of the net assets was $876,440. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 3 – SALE OF CUSTOM POOL (Continued) Custom Pool is presented as a discontinued operation in the consolidated financial statements. The following is a reconciliation of the carrying amounts of major classes of assets and liabilities of the discontinued operation that are disclosed in the accompanying condensed consolidated balance sheet: December 31, 2017 Carrying Amounts of Major Classes of Assets included in Discontinued Operations: Cash $217,422 Accounts Receivable 273,086 Inventory 125,998 Other Current Assets 39,319 Total Current Assets $655,825 Property and Equipment, net 934,343 Intangible Assets, net 109,465 Total Noncurrent Assets 1,043,808 Assets held as Discontinued Operations $1,699,633 Carrying Amounts of Major Classes of Liabilities included in Discontinued Operations: Accounts Payable and Accrued Liabilities $181,463 Bank Line of Credit 12,782 Notes Payable - Current 84,508 Customer Deposits 37,678 Total Current Liabilities 316,431 Notes Payable - Long Term 560,764 Deferred Tax Liability 17,910 Promissory Note - Stockholder 89,378 Total Noncurrent Liabilities 668,052 Liabilities held as Discontinued Operations $984,483 ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 3 – SALE OF CUSTOM POOL (Continued) The following is a reconciliation of the major line items constituting income of discontinued operations, net that are presented in the accompanying Consolidated Statements of Operations: For the Years Ended December 31, 2018 2017 Major Classes of Line Items Constituting Pre-Tax Income on Discontinued Operations: Revenue $ 1,786,911 $ 5,097,018 Cost of Services 1,208,619 3,908,065 General and Administrative 338,877 1,004,514 Other Operating Expenses 51,370 184,573 Total Operating Expenses 1,598,866 5,097,152 Operating Income (Loss) 188,045 (134) Other Expense 9,745 10,444 Total Pre-Tax Income (Loss) from Discontinued Operations 178,300 (10,578) Income Tax (Expense) Benefit (37,367) 26,490 Income from Discontinued Operations $ 140,933 $ 15,912 |
ACQUISITION OF ASSETS FROM CONF
ACQUISITION OF ASSETS FROM CONFIDA AEROSPACE, LTD | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
ACQUISITION OF ASSETS FROM CONFIDA AEROSPACE, LTD | NOTE 4 – ACQUSITION OF ASSETS FROM CONFIDA AEROSPACE, LTD. On May 8, 2018, the Company entered into an Asset Purchase Agreement with Confida Aerospace Ltd. Pursuant to the Asset Purchase Agreement, the Company purchased in-process research and development (“IPRD”) consisting of inventory, hardware designs, software designs, and a trademark all pertaining to passenger drone design and use from Confida Aerospace Ltd. As consideration for the Asset Purchase Agreement, the Company issued Confida Aerospace Ltd., 10,000 of the Company’s Series B preferred shares (See, Note 13, “Convertible Preferred Stock”). Each preferred share is convertible into 1,333 common shares and 1,333 warrants. Each warrant is exercisable into one of the Company’s common shares at an exercise price of $.75. The warrants have an exercise period of five years upon conversion. Additionally, the Company assumed $50,000 of debts incurred by Confida Aerospace Ltd. related to drone development. All of the authorized shares of the Series B Convertible Stock were issued for the assets and $50,000 of accrued liabilities were assumed. The fair market value of the preferred stock was $7,131,214 as determined by an independent third party valuation firm. The fair market value was arrived at using an equivalent conversion into the common stock of Astro, which is trading in the Over-The-Counter Market. Appropriate restrictions and marketability discounts were applied, including using the 40 day volume weighted average price of $0.46 per share. The fair value of the common stock equivalent was $3,753,271. As well, the warrants issued in conjunction with the common stock were valued using the Black Scholes Model. The inputs used were a 40 day volume weighted average price of $0.46 per share, exercise price of $0.75 per share, a ten year term, a risk free rate of 2.97%, a volatility of 51% and no dividend yield. The fair value of the warrants was $3,377,943. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 4 – ACQUSITION OF ASSETS FROM CONFIDA AEROSPACE, LTD. (Continued) The Company determined the fair value of the IPRD based on the fair market value of the consideration paid for the IPRD: 10,000 shares of Series B Convertible Preferred Stock, each share of which is convertible into 1,333 shares of common stock and 1,333 common stock warrants. The drone prototype is in an early development stage and the fair value is not determinable using cash flow projections and such projections were not available. It is anticipated that the drone will be marketable in 2020 and at that time material net cash flows are expected to commence. Further analysis of the IPRD determined that the recoverability of the fair value carrying amount was not probable and an impairment expense of $6,310,214 was incurred to reduce the carrying value of the net assets to $871,000, which approximates cost. As well, after the initial 90 day period for the assumption of liabilities, the Company determined that it would most likely only assume $25,000 of liabilities and has adjusted the consolidated financial statements accordingly. As of December 31, 2018, the expenses related to the liabilities had been incurred and the impairment expense was reduced by $25,000 to $6,285,214. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 5 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles general accepted in the United States of America (“GAAP). Cash All highly liquid investments with original maturities of three months or less or money market accounts held at financial institutions are considered to be cash. Substantially all of the cash is placed with one financial institution. From time to time during the year the cash accounts are exposed to credit loss for amounts in excess of insured limits of $250,000 in the event of non-performance by the institution, however, it is not anticipated that there will be non-performance. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 5 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Intangible Assets – Acquired In-Process Research and Development Acquired in-process research and development consists of acquired drone technology and engineering and trademarks. The Company reviews the IPRD, which currently has an indefinite useful life, for impairment at least annually or more frequently if an event occurs creating the potential for impairment, until such time as the research and development efforts are completed or abandoned. If the research and development efforts are abandoned, the related costs will be written off in the period of such determination. If the research and development efforts are completed successfully, the related assets will be amortized over the estimated useful life of the underlying products. The Company will amortize the cost of identified intangible assets using amortization methods that reflect the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. An impairment expense of $6,285,214 was incurred in the year ended December 31, 2018. Allowance for uncollectible receivables Management evaluates credit quality by evaluating the exposure to individual counterparties, and, where warranted, management also considers the credit rating or financial position, operating results and/or payment history of the counterparty. Management establishes an allowance for amounts for which collection is considered doubtful. Adjustments to previous assessments are recognized in income in the period in which they are determined. At December 31, 2018 and 2017, the allowance for uncollected receivables was $16,653 and $16,181, respectively. Revenue Recognition The Company does not currently have any revenue. In discontinued operations, revenue was recognized when the pool service was completed and the collectability was reasonably assured. For pool resurfacing and remediation work, revenue was recognized at the time of completion of the job. Stock-Based Compensation The Company accounts for stock-based compensation under the fair value recognition provisions of GAAP which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors including stock options and restricted stock issuances based on estimated fair values. In accordance with GAAP, the fair value of stock-based awards is generally recognized as compensation expense over the requisite service period, which is defined as the period during which an employee is required to provide service in exchange for an award. The Company uses a straight-line attribution method for all grants that include only a service condition. Compensation expense related to all awards is included in income. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 5 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Warrants Warrants issued with the 8% Senior Secured Convertible Promissory Note are accounted for under the fair value and relative fair value method. The warrant is first analyzed per its terms as to whether it has derivative features or not. If the warrant is determined to be a derivative and not qualify for equity treatment, then it is measured at fair value using the Black Scholes option model, and recorded as a liability on the balance sheet. The warrant is re-measured at its then current fair value at each subsequent reporting date (it is “marked-to-market”). If the warrant is determined to not have derivative features, it is recorded into equity at its fair value using the Black Scholes option model, however, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the convertible note. The convertible note is recorded at its fair value, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the warrant. Further, the convertible promissory note is examined for any intrinsic beneficial conversion feature (“BCF”) of which the convertible price of the note is less than the closing common stock price on date of issuance. If the relative fair value method is used to value the convertible promissory note and there is an intrinsic BCF, a further analysis is undertaken of the BCF using an effective conversion price which assumes the conversion price is the relative fair value divided by the number of shares the convertible debt is converted into by its terms. The BCF value is accounted for as equity. The warrant and BCF relative fair values are also recorded as a discount to the convertible promissory notes. As present, these equity features of the convertible promissory notes have recorded a discount to the convertible notes that is substantially equal to the proceeds received. Research and Development Research and development costs are expensed as incurred. Income Taxes The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of asset and liabilities. Deferred tax assets and liabilities are determined based on the differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The effect on deferred tax asset and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 5 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Company accounts for uncertainties in income tax law under a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns as prescribed by GAAP. Under GAAP, the tax effects of a position are recognized only if it is “more-likely-than-not” to be sustained by the taxing authority as of the reporting date. If the tax position is not considered “more-likely-than-not” to be sustained, then no benefits of the position are recognized. Management believes there are no unrecognized tax benefits or uncertain tax positions as of December 31, 2018 and 2017. The Company assessed its earnings history, trends and estimates of future earnings and determined that the deferred tax asset could not be realized as of December 31, 2018. Accordingly, a valuation allowance was recorded against the net deferred tax asset. The Company recognizes interest and penalties on income taxes as a component of income tax expense, should such an expense be realized. Basic and Diluted Net (Loss) Earnings per Share The Company computes (loss) earnings per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted (loss) earnings per share on the face of the consolidated statements of operations. Basic (loss) earnings per share is computed by dividing net (loss) income available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted (loss) earnings per share gives effect to all dilutive potential common shares outstanding during the period, computed using the treasury stock method for outstanding stock options and the if converted method for convertible notes and preferred stock. Dilutive (loss) earnings per share excludes all potential common shares if their effect is anti-dilutive. Common stock equivalents are anti-dilutive for the year ended December 31, 2018 due to the net loss during the year. The common stock equivalents are comprised of stock options, convertible promissory notes and the Series A and Series B Convertible Preferred Stock. Further, the Company has presented its discontinued operations in accordance with ASC 205-20, “Presentation of Financial Statements, Discontinued Operations”, which requires the presentation of both basic and diluted (loss) earnings per share from continuing operations and the basic and diluted net (loss) earnings per share from discontinued operations in addition to the basic and diluted net (loss) earnings per share. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 5 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) For the years ended December 31, 2018 and 2017, the basic and diluted net (loss) earnings per share from continuing operations, the basic and diluted net (loss) earnings from discontinued operations and the basic and diluted net (loss) earnings per share were computed as follows: For the Year Ended December 31, 2018 2017 Loss from Continuing Operations, net $ (7,767,532) $ - Income from Discontinued Operations, net 140,933 15,912 Net (Loss) Income Available to Common Stockholders (7,626,599) 15,912 Series A Preferred Stock Dividends 10,000 10,000 Net (Loss) Income Available to Common Stockholders and Assumed Conversions $ (7,636,599) $ 5,912 Weighted Average Shares - Basic 73,771,722 82,938,960 Effective Dilutive Securities – Stock Options - 1,039,352 Shares Issuable Upon Conversion of Convertible Promissory Notes - - Shares Issuable Upon Conversion of Preferred Stock – Series A - 1,562,500 Shares Issuable Upon Conversion of Preferred Stock – Series B - - Weighted Average Shares - Diluted 73,771,722 85,540,812 Net Loss Per Common Share from Continuing Operations: Basic $ (0.11) $ - Diluted $ (0.11) $ - Net Earnings Per Common Share from Discontinued Operations: Basic $ - $ - Diluted $ - $ - Net (Loss) Earnings Per Common Share: Basic $ (0.10) $ - Diluted $ (0.10) $ - Comprehensive (Loss) Income Comprehensive (loss) income consists of net (loss) income plus the foreign currency translation gain. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 5 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Foreign Currency Translation The translation of assets and liabilities for the Company’s foreign subsidiary is made at year end exchange rates, while revenue and expense accounts are translated at the average exchange rates during the year transactions occurred. Fair Value Measurement Generally accepted accounting principles establishes a hierarchy to prioritize the inputs of valuation techniques used to measure fair value. The hierarchy gives the highest ranking to the fair values determined by using unadjusted quoted prices in active markets for identical assets (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). Observable inputs are those that market participants would use in pricing the assets based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The Company has determined the appropriate level of the hierarchy and applied it to its financial assets and liabilities. At December 31, 2018 and 2017 there were no assets or liabilities carried or measured at fair value. Use of Estimates and Assumptions The preparation of consolidated financial statements 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
NOTE 3 - RECENT ACCOUNTING PRON
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 6 – RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-2, Leases (Topic 842) which will require lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with term of more than twelve months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. The new ASU will require both types of leases to be recognized on the balance sheet. The ASU also will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. The ASU is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years. The ASU had no effect on the Company’s consolidated financial statements. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 6 – RECENT ACCOUNTING PRONOUNCEMENTS (Continued) In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which we are required to apply for annual periods beginning after December 15, 2017. The new guidelines currently did not impact our revenue presentation. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this update provide a more robust framework to use in determining when a set of assets and activities is a business. Because the current definition of a business is interpreted broadly and can be difficult to apply, stakeholders indicated that analyzing transactions is inefficient and costly and that the definition does not permit the use of reasonable judgment. The amendments provide more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, “Scope of Modification Accounting”, to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to change to the terms or conditions of a share-based payment award. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless all the following are met: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The current disclosure requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting under the amendments in this update. The amendments in this update become effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. An entity should apply the amendments in this update prospectively to an award modified on or after the adoption date. The Company’s adoption of this standard did not have a material impact on its consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting,” to include share based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 6 – RECENT ACCOUNTING PRONOUNCEMENTS (Continued) awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2018 but no earlier than an entity’s adoption date of Topic 606. The Company evaluated the impact of adopting the new guidance on the consolidated financial statements, but it does not have a material impact. |
NOTE 4 - CONCENTRATIONS OF CRED
NOTE 4 - CONCENTRATIONS OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
NOTE 4 - CONCENTRATIONS OF CREDIT RISK | NOTE 7 – CONCENTRATIONS OF CREDIT RISK Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash. The Company maintains its cash with high-credit quality financial institutions. At December 31, 2018 and 2017 the Company did not have any cash balances in excess of federally insured limits. |
FAIR VALUE ESTIMATES
FAIR VALUE ESTIMATES | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
FAIR VALUE ESTIMATES | NOTE 8 – FAIR VALUE ESTIMATES The Company measures financial instruments at fair value in accordance with ASC 820, which specifies a valuation hierarchy based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s own assumptions. Management believes the carrying amounts of the Company's cash, accounts receivable, accounts payable and accrued liabilities as of December 31, 2018 and 2017 approximate their respective fair values because of the short-term nature of these instruments. The Company measures its line of credit, notes payable and loans in accordance with the hierarchy of fair value based on whether the inputs to those valuation techniques are observable or unobservable. The hierarchy is: Level 1 – Quoted prices for identical instruments in active markets; Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The estimated fair value of the cash, line of credit, notes payable, and loans at December 31, 2018 and 2017, were as follows: ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 8 – FAIR VALUE ESTIMATES (Continued) Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Carrying Value At December 31, 2018: Assets Cash $55,129 - - $55,129 Liabilities 8% Senior Secured Convertible Promissory Note, Net - - $108,886 $108,886 Loan from MAAB - - $591,439 $591,439 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Carrying Value At December 31, 2017: Discontinued Operations: Assets Cash $217,422 - - $217,422 Liabilities: Bank Line of Credit - $12,782 - $12,782 Notes Payable - $574,317 - $645,272 Promissory Note - Stockholder - - $82,228 $89,378 |
CONVERTIBLE PROMISSORY NOTES
CONVERTIBLE PROMISSORY NOTES | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
CONVERTIBLE PROMISSORY NOTES | NOTE 9 – 8% SENIOR SECURED CONVERTIBLE PROMISSORY NOTE On November 21, 2018, the Company issued an 8% Senior Secured Convertible Promissory Note in the aggregate principal amount of $1,383,636 in exchange for a total investment of $1,200,000, less commissions and expenses, payable in two tranches. The first tranche is payable upon the closing of the agreement, and the second tranche will be payable within ten (10) business days of the Investor receiving written notice confirming the effectiveness of the initial registration statement. The first tranche principal of $701,818 was issued, with an Original Issue Discount (“OID”) of $81,818, a $20,000 financing fee for the lender’s transactional expenses that was expensed and the Company received proceeds of $600,000. Each tranche matures 6 months after the issue date. The note is convertible into common shares of the Company at a price equal to 75% of the lowest market price in the thirty trading days prior to the conversion date. The Company is subject to certain penalties if the shares are not issued within two business days of receiving the conversion notice. Pursuant to a Security Agreement between the Company and the Investor (the “Security Agreement”), the Company has granted to the Investor a security interest in its assets to secure repayment of the Notes. The Company must reserve an amount of shares equal to 500% of the total amount of shares issuable upon full conversion of the promissory note. The Company has 250,000,000 common shares authorized, of which 180,691,084 are available to be issued as of December 31, 2018, fulfilling this requirement. As additional consideration for the investment, the Company issued 156,250 shares of its common stock to the Investor, valued at $89,531 at the date of issuance, plus warrants to acquire up to an aggregate 344,029 shares of the Company’s common stock at an exercise price of $0.51 per share. Upon the closing of the second tranche investment, a number of additional warrants shall be issued equal to one quarter of the face value of the note divided by the exercise price, which shall be 110% of the volume weighted average price on the day prior to the second closing date (See Note 17, “Subsequent Events”). Each Warrant is exercisable by the Investor beginning on the Effective Date through the fifth year anniversary thereof. The Note has a beneficial conversion feature which was value, along with the warrants, on a relative fair value method. The warrant fair value (See Note 14, “Warrants”) was $171,121 and the beneficial conversion feature fair value was $523,326 for a total debt discount of $694,447. However, adding the OID and the inducement shares to the debt discount, made final total debt discount $865,796, larger than the principal amount of the Note. Consequently, $163,978 of the debt discount was expensed. Additionally, $108,886 of the debt discount was amortized to interest expense for the year ended December 31, 2018, bringing the debt discount to $592,932 at December 31, 2018. |
CONVERTIBLE PROMISSORY NOTE
CONVERTIBLE PROMISSORY NOTE | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
CONVERTIBLE PROMISSORY NOTE | NOTE 10 – CONVERTIBLE PROMISSORY NOTES On March 14, 2018, 1,500,000 stock options were cancelled and two 10% Convertible Promissory Notes (“Notes”) with a six month maturity were issued to the former option holders. The principal amount was $25,000 each and there was no prepayment penalty. The Notes were convertible into the Company’s common stock based upon the average of the previous ten trading days’ closing price of the stock, at the maturity date of the Notes. Upon conversion of the notes, Bruce Bent or MAAB had the option to purchase the common stock issued at a 5% discount to the average closing price of the stock over the previous 10 trading days. The option to purchase was set to expire ten days after the issuance of the common stock. The option was not exercised. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 10 – CONVERTIBLE PROMISSORY NOTES (Continued) On September 18, 2018, at the maturity of the Notes, the entire outstanding balance was converted into 38,886 shares of common stock of the Company, which included $2,534 of accrued interest. The Company issued the shares of common stock on October 22, 2018. |
PROMISSORY NOTE FROM PARENT
PROMISSORY NOTE FROM PARENT | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
PROMISSORY NOTE FROM PARENT | NOTE 11 – PROMISSORY NOTE FROM MAAB On March 14, 2018, MAAB, the parent of Astro, issued a Promissory Note for monetary advances to the Company of up to $750,000. The Promissory Note matures on February 28, 2021. The Promissory Note has an interest charge of 10%, compounded monthly. Interest accrues on the principal amount or portion thereof which remains unpaid from time to time as well as any interest outstanding, from the date the principal amount is advanced until and including the date upon which the principal amount and all interest due under this promissory note shall be fully paid. The principal amount advanced under the Promissory Note is $591,439 through December 31, 2018. The Company has accrued interest expense of $35,138 at December 31, 2018. |
Income Tax Disclosure _Text Blo
Income Tax Disclosure [Text Block] | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Income Tax Disclosure | NOTE 12 – INCOME TAX As of December 31, 2018, the U.S. Federal and Florida income tax returns filed prior to 2015 are no longer subject to examination by the respective taxing authorities. The differences between the statutory Federal income tax rate and the effective tax rate are summarized as follows for the years ended December 31, 2018 and 2017 for discontinued operations: 2018 2017 Income Taxes (Benefit) at Statutory Rate $37,443 21.0% $(3,597) (34.0%) Increase (Decrease) in Taxes Resulting From: State Taxes, net of Federal Tax Benefit (76) - (2,062) (19.5%) Graduated Tax Rates - - (10,016) (94.7%) Reduction in Federal Income Tax Rate - - (8,681) (82.1%) Other, Net - - (2,134) (20.1%) Income Taxes $37,367 21.0% $(26,490) (250.4%) On December 22, 2017, the "Tax Cuts and Jobs Act of 2017," or the Tax Act, was signed into law. The Tax Act, among other things, reduced the maximum statutory federal corporate income tax rate from 35% to 21% effective January 1, 2018. As a result of enactment of the Tax Act, the Company revalued its net deferred tax asset. This revaluation resulted in an additional benefit to the income tax provision of $8,681 in 2017. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 12 – INCOME TAX (Continued) Deferred income taxes primarily relate to differences between the amounts recorded for financial reporting purposes and the amounts recorded for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows as of December 31, 2018, and 2017: Deferred Income Tax Assets (Liabilities): 2018 2017 Net Operational Loss Carryforwards $ 1,522,188 $ - Intangible Assets 228,699 - Research & Development Costs 165,505 - Organizational Costs - 41,476 Depreciation - (74,910) Other, Net (21,296) 15,524 Gross Deferred Income Tax Assets (Liabilities) $ 1,895,096 $ (17,910) Less: Valuation Allowance (1,895,096) - Net Deferred Income Tax Asset $ - $ (17,910) At December 31, 2018, the Company has net operating loss carryforwards of approximately $654,000 available to offset future taxable income with no expiration. Realization of the deferred tax assets, which relate to operating loss carry-forwards and timing differences, is dependent on future earnings. The timing and amount of future earnings are uncertain and therefore the Company has established a 100% valuation allowance. |
CONVERTIBLE PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
CONVERTIBLE PREFERRED STOCK | NOTE 13 – CONVERTIBLE PREFERRED STOCK In December 2015, the Company authorized 50,000,000 shares of Series A Preferred Stock, with a $0.0001 par value and no liquidation value. The Series A Preferred has an 8% dividend paid quarterly, and is convertible into one share of common stock. The Series A Preferred is senior to the common stock as to dividends, and any liquidation, dissolution or winding up of the Company. The Series A Preferred also has certain voting and registration rights. In January 2016, the Company issued 1,562,500 shares of the Series A Preferred Stock to Lawrence and Loreen Calarco, former officers and directors of the Company. On March 14, 2018, Lawrence and Loreen Calarco, officers and directors of the Company, the Lawrence & Loreen Calarco Family Trust and the Lawrence and Loreen Calarco Trust of June 3, 2014, sold all 1,562,500 preferred shares to MAAB, a non-affiliate of the Company. Cumulative undeclared Series A Preferred dividends were $7,500 at December 31, 2018. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 13 – CONVERTIBLE PREFERRED STOCK (Continued) On May 4, 2018, the Board of Directors of Astro Aerospace Ltd. authorized 10,000 shares of the Series B Convertible Preferred Stock, par value $0.001 per share. The Preferred is entitled to a dividend, when declared by the Board of Directors, votes with all other classes of stock as a single class of stock on all actions to be voted on by the stockholders of the Company, and each share of Preferred is convertible into 1,333 shares of common stock and a five year warrant to purchase 1,333 shares of common stock at an exercise price of $0.75 per share. On May 8, 2018, the Company issued all of the 10,000 authorized Series B Preferred shares in the acquisition of certain assets from Confida Aerospace Ltd. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of the shares of the Series B Preferred Stock shall share pro rata with the holders of the common stock, on an as if converted basis. |
Warrant
Warrant | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Warrant | NOTE 14 – WARRANTS As part of the 8% Senior Secured Convertible Promissory Note issuance, the Company issued warrants to acquire up to an aggregate 344,029 shares of the Company’s common stock at an exercise price of $0.51 per share. These warrants were fair valued using the Black Scholes Model with the following inputs: stock price on November 21, 2018, date of issuance, $0.57, strike price $0.51, time to expiration, five years, five year Treasury constant maturity rate, 2.33%, volatility 253% and no dividend yield. The result was a fair value of $0.5676 per warrant or $195,271 in aggregate. This fair value was reduced with the relative fair value method when including the beneficial conversion feature of the convertible note (See Note 9, “8% Senior Secured Convertible Promissory Note”) to $171,121. The warrant relative fair value was added to additional paid in capital – common stock. Upon funding of the second tranche of the convertible note, additional warrants will be issued equal to one quarter of the face value of the note divided by the exercise price, which shall be 110% of the volume weighted average price on the day prior to the second closing date. A summary of the warrant activity follows: Warrants Outstanding Exercise Price per Share Price per Share on Date of Issuance Balance, December 31, 2017 - - - Granted - Confida Acquisition 13,330,000 $0.75 $1.00 Convertible Promissory Note 344,029 0.51 0.57 Expired - - - Balance, December 31, 2018 13,674,029 0.51-0.75 0.57-1.00 |
2014 STOCK AWARDS PLAN
2014 STOCK AWARDS PLAN | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
2014 STOCK AWARDS PLAN | NOTE 15 – 2014 STOCK AWARDS PLAN In November 2014, the board of directors of the Company approved the adoptions of a Stock Awards Plan. A total of 7,000,000 shares were authorized to be issued under the plan. For incentive stock options, at the grant date the stock options exercise price is required to be at least 110% of the fair value of the Company’s common stock. The Plan permits the grants of common stock or options to purchase common stock. As plan administrator, the Board of Directors has sole discretion to set the price of the options. Further, the Board of Directors may amend or terminate the plan. On March 14, 2018, the Company cancelled all 3,250,000 outstanding stock options under the 2014 Stock Awards Plan, with 1,500,000 of the stock options exchanged for two 10% Convertible Promissory Notes with a six month maturity (see Note 10, “Convertible Promissory Notes”). Consequently, there are 7,000,000 shares available for issuance at December 31, 2018. A summary of the stock option activity over the years ended December 31, 2018 and 2017 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at Dec. 31, 2016 3,250,000 $ 0.0367 4.3 Years $ 54,429 Granted - - - - Outstanding at December 31, 2017 3,250,000 $ 0.0367 3.3 Years $ 56,125 Exercisable at December 31, 2017 2,153,014 $ 0.037 3.3 Years $ 36,823 Outstanding at Dec. 31, 2017 3,250,000 $0.0367 3.3 Years $ 56,125 Options Cancelled (3,250,000) - - - Outstanding at December 31, 2018 - - - - Exercisable at December 31, 2018 - - - - The Company expensed $22,857 and $11,413 of stock option compensation for the years ended December 31, 2018 and 2017 respectively. The unamortized stock option compensation of $20,574 as of March 14, 2018 was expensed in the year ended December 31, 2018. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
COMMITMENTS AND CONTINGENCIES | NOTE 16 – COMMITMENTS AND CONTINGENCIES The Company does not have any significant or long term commitments. The Company is not currently subject to any litigation. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
SUBSEQUENT EVENTS | NOTE 17 - SUBSEQUENT EVENTS The Company has evaluated subsequent events from the consolidated balance sheet date through April 15, 2018 (the financial statement issuance date) and noted the following disclosure: In February 2019, the second tranche of the 8% Senior Secured Convertible Promissory Note was issued with a principal amount of $681,818, an OID of $81,818 and proceeds to the Company of $600,000. Additional warrants of 421,656 were issued pursuant to the Note Agreement. On February 11, 2019, the Company issued the 156,250 inducement shares for the issuance of the 8% Senior Secured Convertible Promissory Note. On February 13, 2019, the Company engaged Rok Marketing, Inc. to market the Company and its stock. The compensation is $100,000 in cash payable upon execution of the agreement and 100,000 shares of common stock, also payable on the date of execution. On February 22, 2019, Oasis Capital converted $55,387 of the principal amount of the 8% Senior Secured Convertible Promissory Note at $0.23 into 215,054 shares of the Company’s common stock. |
NOTE 1 - NATURE OF OPERATIONS_
NOTE 1 - NATURE OF OPERATIONS: Going Concern (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of our business. As reflected in the accompanying consolidated financial statements, for the year ended December 31, 2018 the Company had a net loss of $(7,626,599) and used $(1,373,936) cash in operations, and at December 31, 2018, had negative working capital of $(95,862), current assets of $106,976, and an accumulated deficit of $(8,011,802). The foregoing factors raise substantial doubt about the Company’s ability to continue as a going concern. Ultimately, the ability to continue as a going concern is dependent upon the Company’s ability to attract significant new sources of capital, attain a reasonable threshold of operating efficiencies and achieve profitable operations by licensing or otherwise commercializing products incorporating the Company’s technologies. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company acknowledges that its current cash position is insufficient to maintain the current level of operations and research and development, and that the Company will be required to raise substantial additional capital to continue its operations and fund its future business plans. The Company has continued to raise funds through its parent, MAAB and the outstanding note payable balance was $591,439 and there is $158,561 available under the terms of the note at December 31, 2018. The Company has also raised funds through independent capital sources, of which the Company has a Senior Secured Convertible Promissory Note with an outstanding balance of $701,818 at December 31, 2018. Astro plans to raise additional capital in the private and public securities markets in 2019. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Principles of Consolidation (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles general accepted in the United States of America (“GAAP). |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Cash (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Cash | Cash All highly liquid investments with original maturities of three months or less or money market accounts held at financial institutions are considered to be cash. Substantially all of the cash is placed with one financial institution. From time to time during the year the cash accounts are exposed to credit loss for amounts in excess of insured limits of $250,000 in the event of non-performance by the institution, however, it is not anticipated that there will be non-performance. |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: In Process Research and Development, Policy [Policy Text Block] (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
In Process Research and Development, Policy | Intangible Assets – Acquired In-Process Research and Development Acquired in-process research and development consists of acquired drone technology and engineering and trademarks. The Company reviews the IPRD, which currently has an indefinite useful life, for impairment at least annually or more frequently if an event occurs creating the potential for impairment, until such time as the research and development efforts are completed or abandoned. If the research and development efforts are abandoned, the related costs will be written off in the period of such determination. If the research and development efforts are completed successfully, the related assets will be amortized over the estimated useful life of the underlying products. The Company will amortize the cost of identified intangible assets using amortization methods that reflect the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. An impairment expense of $6,285,214 was incurred in the year ended December 31, 2018. |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Allowance for uncollectible receivables (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Allowance for uncollectible receivables | Allowance for uncollectible receivables Management evaluates credit quality by evaluating the exposure to individual counterparties, and, where warranted, management also considers the credit rating or financial position, operating results and/or payment history of the counterparty. Management establishes an allowance for amounts for which collection is considered doubtful. Adjustments to previous assessments are recognized in income in the period in which they are determined. At December 31, 2018 and 2017, the allowance for uncollected receivables was $16,653 and $16,181, respectively. |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Revenue Recognition | Revenue Recognition The Company does not currently have any revenue. In discontinued operations, revenue was recognized when the pool service was completed and the collectability was reasonably assured. For pool resurfacing and remediation work, revenue was recognized at the time of completion of the job. |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Stock-Based Compensation (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation under the fair value recognition provisions of GAAP which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors including stock options and restricted stock issuances based on estimated fair values. In accordance with GAAP, the fair value of stock-based awards is generally recognized as compensation expense over the requisite service period, which is defined as the period during which an employee is required to provide service in exchange for an award. The Company uses a straight-line attribution method for all grants that include only a service condition. Compensation expense related to all awards is included in income. |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Warrant Policy (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Warrant Policy | Warrants Warrants issued with the 8% Senior Secured Convertible Promissory Note are accounted for under the fair value and relative fair value method. The warrant is first analyzed per its terms as to whether it has derivative features or not. If the warrant is determined to be a derivative and not qualify for equity treatment, then it is measured at fair value using the Black Scholes option model, and recorded as a liability on the balance sheet. The warrant is re-measured at its then current fair value at each subsequent reporting date (it is “marked-to-market”). If the warrant is determined to not have derivative features, it is recorded into equity at its fair value using the Black Scholes option model, however, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the convertible note. The convertible note is recorded at its fair value, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the warrant. Further, the convertible promissory note is examined for any intrinsic beneficial conversion feature (“BCF”) of which the convertible price of the note is less than the closing common stock price on date of issuance. If the relative fair value method is used to value the convertible promissory note and there is an intrinsic BCF, a further analysis is undertaken of the BCF using an effective conversion price which assumes the conversion price is the relative fair value divided by the number of shares the convertible debt is converted into by its terms. The BCF value is accounted for as equity. The warrant and BCF relative fair values are also recorded as a discount to the convertible promissory notes. As present, these equity features of the convertible promissory notes have recorded a discount to the convertible notes that is substantially equal to the proceeds received. |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Research and Development Expense, Policy [Policy Text Block] (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Research and Development Expense, Policy | Research and Development Research and development costs are expensed as incurred. |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Income Taxes (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Income Taxes | Income Taxes The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of asset and liabilities. Deferred tax assets and liabilities are determined based on the differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The effect on deferred tax asset and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 5 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Company accounts for uncertainties in income tax law under a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns as prescribed by GAAP. Under GAAP, the tax effects of a position are recognized only if it is “more-likely-than-not” to be sustained by the taxing authority as of the reporting date. If the tax position is not considered “more-likely-than-not” to be sustained, then no benefits of the position are recognized. Management believes there are no unrecognized tax benefits or uncertain tax positions as of December 31, 2018 and 2017. The Company assessed its earnings history, trends and estimates of future earnings and determined that the deferred tax asset could not be realized as of December 31, 2018. Accordingly, a valuation allowance was recorded against the net deferred tax asset. The Company recognizes interest and penalties on income taxes as a component of income tax expense, should such an expense be realized. |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basic and Diluted Net Earnings per Share (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Basic and Diluted Net Earnings per Share | Basic and Diluted Net (Loss) Earnings per Share The Company computes (loss) earnings per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted (loss) earnings per share on the face of the consolidated statements of operations. Basic (loss) earnings per share is computed by dividing net (loss) income available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted (loss) earnings per share gives effect to all dilutive potential common shares outstanding during the period, computed using the treasury stock method for outstanding stock options and the if converted method for convertible notes and preferred stock. Dilutive (loss) earnings per share excludes all potential common shares if their effect is anti-dilutive. Common stock equivalents are anti-dilutive for the year ended December 31, 2018 due to the net loss during the year. The common stock equivalents are comprised of stock options, convertible promissory notes and the Series A and Series B Convertible Preferred Stock. Further, the Company has presented its discontinued operations in accordance with ASC 205-20, “Presentation of Financial Statements, Discontinued Operations”, which requires the presentation of both basic and diluted (loss) earnings per share from continuing operations and the basic and diluted net (loss) earnings per share from discontinued operations in addition to the basic and diluted net (loss) earnings per share. ASTRO AEROSPACE LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2018 And 2017 And For The Years Then Ended NOTE 5 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) For the years ended December 31, 2018 and 2017, the basic and diluted net (loss) earnings per share from continuing operations, the basic and diluted net (loss) earnings from discontinued operations and the basic and diluted net (loss) earnings per share were computed as follows: For the Year Ended December 31, 2018 2017 Loss from Continuing Operations, net $ (7,767,532) $ - Income from Discontinued Operations, net 140,933 15,912 Net (Loss) Income Available to Common Stockholders (7,626,599) 15,912 Series A Preferred Stock Dividends 10,000 10,000 Net (Loss) Income Available to Common Stockholders and Assumed Conversions $ (7,636,599) $ 5,912 Weighted Average Shares - Basic 73,771,722 82,938,960 Effective Dilutive Securities – Stock Options - 1,039,352 Shares Issuable Upon Conversion of Convertible Promissory Notes - - Shares Issuable Upon Conversion of Preferred Stock – Series A - 1,562,500 Shares Issuable Upon Conversion of Preferred Stock – Series B - - Weighted Average Shares - Diluted 73,771,722 85,540,812 Net Loss Per Common Share from Continuing Operations: Basic $ (0.11) $ - Diluted $ (0.11) $ - Net Earnings Per Common Share from Discontinued Operations: Basic $ - $ - Diluted $ - $ - Net (Loss) Earnings Per Common Share: Basic $ (0.10) $ - Diluted $ (0.10) $ - |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Comprehensive (Loss) Income (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Comprehensive (Loss) Income | Comprehensive (Loss) Income Comprehensive (loss) income consists of net (loss) income plus the foreign currency translation gain. |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Foreign Currency Translation (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Foreign Currency Translation | Foreign Currency Translation The translation of assets and liabilities for the Company’s foreign subsidiary is made at year end exchange rates, while revenue and expense accounts are translated at the average exchange rates during the year transactions occurred. |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Fair Value Measurement (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Fair Value Measurement | Fair Value Measurement Generally accepted accounting principles establishes a hierarchy to prioritize the inputs of valuation techniques used to measure fair value. The hierarchy gives the highest ranking to the fair values determined by using unadjusted quoted prices in active markets for identical assets (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). Observable inputs are those that market participants would use in pricing the assets based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The Company has determined the appropriate level of the hierarchy and applied it to its financial assets and liabilities. At December 31, 2018 and 2017 there were no assets or liabilities carried or measured at fair value. |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Use of Estimates and Assumptions (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of consolidated financial statements 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
SALE OF CUSTOM POOL_ Disposal G
SALE OF CUSTOM POOL: Disposal Groups, Including Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Disposal Groups, Including Discontinued Operations | December 31, 2017 Carrying Amounts of Major Classes of Assets included in Discontinued Operations: Cash $217,422 Accounts Receivable 273,086 Inventory 125,998 Other Current Assets 39,319 Total Current Assets $655,825 Property and Equipment, net 934,343 Intangible Assets, net 109,465 Total Noncurrent Assets 1,043,808 Assets held as Discontinued Operations $1,699,633 Carrying Amounts of Major Classes of Liabilities included in Discontinued Operations: Accounts Payable and Accrued Liabilities $181,463 Bank Line of Credit 12,782 Notes Payable - Current 84,508 Customer Deposits 37,678 Total Current Liabilities 316,431 Notes Payable - Long Term 560,764 Deferred Tax Liability 17,910 Promissory Note - Stockholder 89,378 Total Noncurrent Liabilities 668,052 Liabilities held as Discontinued Operations $984,483 |
SALE OF CUSTOM POOL_ Schedule o
SALE OF CUSTOM POOL: Schedule of Income (Loss) of Discontinued Operations, Statement of Operations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Income (Loss) of Discontinued Operations, Statement of Operations | For the Years Ended December 31, 2018 2017 Major Classes of Line Items Constituting Pre-Tax Income on Discontinued Operations: Revenue $ 1,786,911 $ 5,097,018 Cost of Services 1,208,619 3,908,065 General and Administrative 338,877 1,004,514 Other Operating Expenses 51,370 184,573 Total Operating Expenses 1,598,866 5,097,152 Operating Income (Loss) 188,045 (134) Other Expense 9,745 10,444 Total Pre-Tax Income (Loss) from Discontinued Operations 178,300 (10,578) Income Tax (Expense) Benefit (37,367) 26,490 Income from Discontinued Operations $ 140,933 $ 15,912 |
SUMMARY OF SIGNIFICANT ACCOU_17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basic and Diluted Net Earnings per Share: Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Earnings Per Share, Basic and Diluted | For the Year Ended December 31, 2018 2017 Loss from Continuing Operations, net $ (7,767,532) $ - Income from Discontinued Operations, net 140,933 15,912 Net (Loss) Income Available to Common Stockholders (7,626,599) 15,912 Series A Preferred Stock Dividends 10,000 10,000 Net (Loss) Income Available to Common Stockholders and Assumed Conversions $ (7,636,599) $ 5,912 Weighted Average Shares - Basic 73,771,722 82,938,960 Effective Dilutive Securities – Stock Options - 1,039,352 Shares Issuable Upon Conversion of Convertible Promissory Notes - - Shares Issuable Upon Conversion of Preferred Stock – Series A - 1,562,500 Shares Issuable Upon Conversion of Preferred Stock – Series B - - Weighted Average Shares - Diluted 73,771,722 85,540,812 Net Loss Per Common Share from Continuing Operations: Basic $ (0.11) $ - Diluted $ (0.11) $ - Net Earnings Per Common Share from Discontinued Operations: Basic $ - $ - Diluted $ - $ - Net (Loss) Earnings Per Common Share: Basic $ (0.10) $ - Diluted $ (0.10) $ - |
FAIR VALUE ESTIMATES_ Schedule
FAIR VALUE ESTIMATES: Schedule of Financial Assets and Liabilities measured at fair value on a recurring basis (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Financial Assets and Liabilities measured at fair value on a recurring basis | Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Carrying Value At December 31, 2018: Assets Cash $55,129 - - $55,129 Liabilities 8% Senior Secured Convertible Promissory Note, Net - - $108,886 $108,886 Loan from MAAB - - $591,439 $591,439 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Carrying Value At December 31, 2017: Discontinued Operations: Assets Cash $217,422 - - $217,422 Liabilities: Bank Line of Credit - $12,782 - $12,782 Notes Payable - $574,317 - $645,272 Promissory Note - Stockholder - - $82,228 $89,378 |
Income Tax Disclosure _Text B_2
Income Tax Disclosure [Text Block]: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Effective Income Tax Rate Reconciliation | 2018 2017 Income Taxes (Benefit) at Statutory Rate $37,443 21.0% $(3,597) (34.0%) Increase (Decrease) in Taxes Resulting From: State Taxes, net of Federal Tax Benefit (76) - (2,062) (19.5%) Graduated Tax Rates - - (10,016) (94.7%) Reduction in Federal Income Tax Rate - - (8,681) (82.1%) Other, Net - - (2,134) (20.1%) Income Taxes $37,367 21.0% $(26,490) (250.4%) |
Income Tax Disclosure _Text B_3
Income Tax Disclosure [Text Block]: Schedule of Deferred Tax Assets and Liabilities [Table Text Block] (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | Deferred Income Tax Assets (Liabilities): 2018 2017 Net Operational Loss Carryforwards $ 1,522,188 $ - Intangible Assets 228,699 - Research & Development Costs 165,505 - Organizational Costs - 41,476 Depreciation - (74,910) Other, Net (21,296) 15,524 Gross Deferred Income Tax Assets (Liabilities) $ 1,895,096 $ (17,910) Less: Valuation Allowance (1,895,096) - Net Deferred Income Tax Asset $ - $ (17,910) |
Warrant_ Warrant activity table
Warrant: Warrant activity table (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Warrant activity table | Warrants Outstanding Exercise Price per Share Price per Share on Date of Issuance Balance, December 31, 2017 - - - Granted - Confida Acquisition 13,330,000 $0.75 $1.00 Convertible Promissory Note 344,029 0.51 0.57 Expired - - - Balance, December 31, 2018 13,674,029 0.51-0.75 0.57-1.00 |
2014 STOCK AWARDS PLAN_ Share-b
2014 STOCK AWARDS PLAN: Share-based Compensation, Stock Options, Activity [Table Text Block] (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Share-based Compensation, Stock Options, Activity | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at Dec. 31, 2016 3,250,000 $ 0.0367 4.3 Years $ 54,429 Granted - - - - Outstanding at December 31, 2017 3,250,000 $ 0.0367 3.3 Years $ 56,125 Exercisable at December 31, 2017 2,153,014 $ 0.037 3.3 Years $ 36,823 Outstanding at Dec. 31, 2017 3,250,000 $0.0367 3.3 Years $ 56,125 Options Cancelled (3,250,000) - - - Outstanding at December 31, 2018 - - - - Exercisable at December 31, 2018 - - - - |
NOTE 1 - NATURE OF OPERATIONS_2
NOTE 1 - NATURE OF OPERATIONS: Going Concern (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Net (Loss) Income | $ (7,626,599) | $ 15,912 |
Net Cash Provided by (Used in) Operating Activities | (1,373,936) | (22,870) |
Capital | (95,862) | |
Assets, Current | 106,976 | 1,699,633 |
Retained Earnings (Accumulated Deficit) | (8,011,802) | 277,467 |
Promissory Note from Parent | $ 591,439 | $ 0 |
SALE OF CUSTOM POOL_ Disposal_2
SALE OF CUSTOM POOL: Disposal Groups, Including Discontinued Operations (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Details | ||
Cash, Including Discontinued Operations | $ 217,422 | |
Accounts Receivable | 273,086 | |
Inventory | 125,998 | |
Other Current Assets | 39,319 | |
Total Current Assets | 655,825 | |
Property and Equipment, net | 934,343 | |
Intangible Assets, net | 109,465 | |
Total Noncurrent Assets | 1,043,808 | |
Assets held as Discontinued Operations | $ 0 | 1,699,633 |
Accounts Payable and Accrued Liabilities | 181,463 | |
Disposal Group Including Discontinued Operation Bank Line of Credit | 12,782 | |
Disposal Group Including Discontinued Operation Notes Payable Current | 84,508 | |
Disposal Group Including Discontinued Operation Customer Deposits | 37,678 | |
Total Current Liabilities | 316,431 | |
Disposal Group Including Discontinued Operation Notes Payable Long Term | 560,764 | |
Deferred Tax Liability | 17,910 | |
Disposal Group Including Discontinued Operation Related Party Promissory Note | 89,378 | |
Total Noncurrent Liabilities | 668,052 | |
Liabilities held as Discontinued Operations | $ 0 | $ 984,483 |
SALE OF CUSTOM POOL_ Schedule_2
SALE OF CUSTOM POOL: Schedule of Income (Loss) of Discontinued Operations, Statement of Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Revenue | $ 1,786,911 | $ 5,097,018 |
Cost of Services | 1,208,619 | 3,908,065 |
General and Administrative | 338,877 | 1,004,514 |
Other Operating Expenses | 51,370 | 184,573 |
Disposal Group Including Discontinued Operation Total Operating Expenses | 1,598,866 | 5,097,152 |
Operating Income (Loss) | 188,045 | (134) |
Disposal Group Including Discontinued Operation Other (Expense) Income | 9,745 | 10,444 |
Total Pre-Tax Income (Loss) from Discontinued Operations | 178,300 | (10,578) |
Income Tax (Expense) Benefit | (37,367) | 26,490 |
Income from Discontinued Operations | $ 140,933 | $ 15,912 |
ACQUISITION OF ASSETS FROM CO_2
ACQUISITION OF ASSETS FROM CONFIDA AEROSPACE, LTD (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | May 08, 2018 | Jan. 31, 2016 | |
Details | ||||
Preferred Stock, Shares Issued | 10,000 | 1,562,500 | ||
Impairment Expense | $ 6,285,214 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: In Process Research and Development, Policy [Policy Text Block] (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Impairment Expense | $ 6,285,214 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Allowance for uncollectible receivables (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Details | ||
Allowance for Doubtful Accounts Receivable | $ 16,653 | $ 16,181 |
SUMMARY OF SIGNIFICANT ACCOU_20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basic and Diluted Net Earnings per Share: Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | $ (7,767,532) | $ 0 |
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 140,933 | 15,912 |
Net (Loss) Income Available to Common Stockholders - Diluted | (7,626,599) | 15,912 |
Series A Preferred Stock Dividends | 10,000 | 10,000 |
Net (Loss) Income Available to Common Stockholders and Assumed Conversions | $ (7,636,599) | $ 5,912 |
Weighted Average Number of Shares Outstanding, Basic | 73,771,722 | 82,938,960 |
Effective Dilutive Securities - Stock Options | $ 0 | $ 1,039,352 |
Shares Issuable Upon Conversion of Convertible Promissory Notes | 0 | 0 |
Shares Issuable Upon Conversion of Preferred Stock - Series A | 0 | 1,562,500 |
Shares Issuable Upon Conversion of Preferred Stock - Series B | $ 0 | $ 0 |
Weighted Average Number of Shares Outstanding, Basic | 73,771,722 | 85,540,812 |
Net Loss From Continuing Operations per Common Share - Basic | $ (0.11) | $ 0 |
Net Loss From Continuing Operations per Common Share - Diluted | (0.11) | 0 |
Net Earnings From Discontinued Operations per Common Share - Basic | 0 | 0 |
Net Earnings From Discontinued Operations per Common Share - Diluted | 0 | 0 |
Earnings Per Share, Basic | (0.10) | 0 |
Earnings Per Share, Diluted | $ (0.10) | $ 0 |
FAIR VALUE ESTIMATES_ Schedul_2
FAIR VALUE ESTIMATES: Schedule of Financial Assets and Liabilities measured at fair value on a recurring basis (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Cash | $ 55,129 | $ 217,422 |
Senior Secured Convertible Promissory Note | 108,886 | |
Loan from Parent | 591,439 | |
Bank Line of Credit | 12,782 | |
Notes Payable | 645,272 | |
Promissory Note - Stockholder | 89,378 | |
Fair Value, Inputs, Level 1 | ||
Cash | 55,129 | 217,422 |
Senior Secured Convertible Promissory Note | 0 | |
Loan from Parent | 0 | |
Bank Line of Credit | 0 | |
Notes Payable | 0 | |
Promissory Note - Stockholder | 0 | |
Fair Value, Inputs, Level 2 | ||
Cash | 0 | 0 |
Senior Secured Convertible Promissory Note | 0 | |
Loan from Parent | 0 | |
Bank Line of Credit | 12,782 | |
Notes Payable | 574,317 | |
Promissory Note - Stockholder | 0 | |
Fair Value, Inputs, Level 3 | ||
Cash | 0 | 0 |
Senior Secured Convertible Promissory Note | 108,886 | |
Loan from Parent | $ 591,439 | |
Bank Line of Credit | 0 | |
Notes Payable | 0 | |
Promissory Note - Stockholder | $ 82,228 |
CONVERTIBLE PROMISSORY NOTES (D
CONVERTIBLE PROMISSORY NOTES (Details) | Dec. 31, 2018USD ($) |
Details | |
Debt Instrument, Unamortized Discount | $ 592,932 |
PROMISSORY NOTE FROM PARENT (De
PROMISSORY NOTE FROM PARENT (Details) | Dec. 31, 2018USD ($) |
Details | |
Principal amount advaned under promissory note from parent | $ 591,439 |
Accrued interest expense of promissory note from parent | $ 35,138 |
Income Tax Disclosure _Text B_4
Income Tax Disclosure [Text Block]: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Income Taxes (Benefit) at Statutory Rate | $ 37,443 | $ (3,597) |
State Taxes, net of Federal Tax Benefit | (76) | (2,062) |
Graduated Tax Rates | 0 | (10,016) |
Reduction in Federal Income Tax Rate | 0 | (8,681) |
Other, Net | $ 0 | $ (2,134) |
Income Tax Disclosure _Text B_5
Income Tax Disclosure [Text Block]: Schedule of Deferred Tax Assets and Liabilities [Table Text Block] (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Details | ||
Net Operational Loss Carryforwards | $ 1,522,188 | $ 0 |
Intangible Assets | 228,699 | 0 |
Research & Development Costs | 165,505 | 0 |
Organizational Costs | 0 | 41,476 |
Depreciation | 0 | (74,910) |
Other Net Deferred Tax Assets | (21,296) | 15,524 |
Gross Deferred Income Tax Assets (Liabilities) | 1,895,096 | (17,910) |
Less: Valuation Allowance | $ (1,895,096) | $ 0 |
Income Tax Disclosure _Text B_6
Income Tax Disclosure [Text Block] (Details) | Dec. 31, 2018USD ($) |
Details | |
Deferred Tax Assets, Operating Loss Carryforwards | $ 654,000 |
CONVERTIBLE PREFERRED STOCK (De
CONVERTIBLE PREFERRED STOCK (Details) - shares | May 08, 2018 | Jan. 31, 2016 |
Details | ||
Preferred Stock, Shares Issued | 10,000 | 1,562,500 |
2014 STOCK AWARDS PLAN (Details
2014 STOCK AWARDS PLAN (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Excluding Stock Options | $ 22,857 | $ 11,413 |