Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 08, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | DIRECTVIEW HOLDINGS INC | |
Entity Central Index Key | 0001441769 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 678,099,996 | |
Trading Symbol | DIRV | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash | $ 86,805 | $ 101,116 |
Accounts Receivable, net | 181,727 | 234,546 |
Contract Assets | 40,384 | 97,140 |
Inventory | 117,300 | 108,805 |
Other Current Assets | 114,464 | 149,340 |
Total Current Assets | 540,680 | 690,947 |
PROPERTY AND EQUIPMENT, net | 10,995 | 12,522 |
Goodwill | 794,830 | 794,830 |
Intangible Assets, net | 424,474 | 476,115 |
Total Assets | 1,770,979 | 1,974,414 |
CURRENT LIABILITIES: | ||
Convertible Promissory Notes, net of debt discounts of $3,219,241 and $3,105,166 at March 31, 2019 and December 31, 2018, respectively | 4,507,748 | 4,257,574 |
Short Term Advances | 146,015 | 146,015 |
Note Payable | 116,792 | 165,355 |
Accounts Payable | 671,257 | 606,819 |
Credit Card Payable | 311,708 | 305,093 |
Accrued Expenses | 4,762,529 | 4,542,124 |
Contract Liability | 5,175 | 5,735 |
Due to Related Parties | 1,814 | 1,814 |
Note Payable - related party, current | 52,000 | 52,000 |
Derivative Liability | 11,853,953 | 11,959,000 |
Total Current Liabilities | 22,428,991 | 22,041,529 |
Note Payable-related party, net of current portion | 714,000 | 726,000 |
Total Liabilities | 23,142,991 | 22,767,529 |
Commitments and Contingencies (see Note 15) | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred Stock ($0.0001 Par Value; 5,000,000 Shares Authorized; Series A (51 shares designated 51 shares issued and outstanding as of March 31, 2019 and December 31, 2018) | ||
Common Stock ($0.0001 Par Value; 4,000,000,000 Shares Authorized; 613,873,952 and 470,029,589 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively) | 61,387 | 47,003 |
Additional Paid-in Capital | 18,948,047 | 18,611,890 |
Accumulated Deficit | (40,350,771) | (39,427,642) |
Total DirectView Holdings, Inc. Stockholders' Deficit | (21,341,337) | (20,768,749) |
Non-Controlling Interest in Subsidiary | (30,675) | (24,366) |
Total Stockholders' Deficit | (21,372,012) | (20,793,115) |
Total Liabilities and Stockholders' Deficit | $ 1,770,979 | $ 1,974,414 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Convertible promissory notes, debt discounts | $ 3,219,241 | $ 3,105,166 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized shares | 5,000,000 | 5,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 4,000,000,000 | 4,000,000,000 |
Common stock, issued shares | 613,873,952 | 470,029,589 |
Common stock, outstanding shares | 613,873,952 | 470,029,589 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares designated | 51 | 51 |
Preferred stock, issued shares | 51 | 51 |
Preferred stock, outstanding shares | 51 | 51 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
NET SALES: | ||
Total Net Sales | $ 625,581 | $ 1,201,130 |
COST OF SALES: | ||
Total Cost of Sales | 435,462 | 658,278 |
GROSS PROFIT | 190,119 | 542,852 |
OPERATING EXPENSES: | ||
Marketing and Public Relations | 233,746 | 198,982 |
Rent | 34,113 | 34,114 |
Depreciation | 1,528 | 50,140 |
Amortization | 51,642 | 51,641 |
Compensation and Related Taxes | 477,660 | 319,526 |
Other Selling, General and Administrative | 240,998 | 241,493 |
Total Operating Expenses | 1,039,687 | 895,896 |
LOSS FROM OPERATIONS | (849,568) | (353,044) |
Gain (Loss) on Change in Fair Value of Derivative Liabilities | 2,258,405 | (24,902,861) |
Gain on Change of Derivative Liabilities from Convertible Notes Payable Conversions | 207,642 | |
Initial Derivative Expense | (1,549,000) | (425,600) |
Amortization of Debt Discount | (646,602) | (108,191) |
Amortization of Deferred Financing Costs | (43,406) | (1,965) |
Interest Expense | (306,909) | (301,839) |
Total Other Expense | (79,870) | (25,740,456) |
NET LOSS | (929,438) | (26,093,500) |
Net Loss Attributable to Non-Controlling Interest | 6,309 | 20,983 |
Net Loss Attributable to DirectView Holdings, Inc. | $ (923,129) | $ (26,072,517) |
NET LOSS PER COMMON SHARE | ||
Basic | $ 0 | $ (0.58) |
Diluted | $ 0 | $ (0.58) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||
Basic | 524,764,147 | 44,908,006 |
Diluted | 524,764,147 | 44,908,006 |
Sales of Product [Member] | ||
NET SALES: | ||
Total Net Sales | $ 497,646 | $ 967,057 |
Services [Member] | ||
NET SALES: | ||
Total Net Sales | 127,935 | 234,073 |
Cost of Product [Member] | ||
COST OF SALES: | ||
Total Cost of Sales | 311,455 | 416,346 |
Cost of Services [Member] | ||
COST OF SALES: | ||
Total Cost of Sales | $ 124,007 | $ 241,932 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Non-Controlling Interest [Member] | Total |
Balance at Dec. 31, 2017 | $ 1,387 | $ 17,158,926 | $ (29,396,982) | $ 2,941 | $ (12,233,728) | |
Balance, shares at Dec. 31, 2017 | 51 | 13,873,971 | ||||
Issuance of Common Stock in connection with the conversion of convertible promissory notes and accrued interest | $ 8,847 | 213,043 | 221,890 | |||
Issuance of Common Stock in connection with the conversion of convertible promissory notes and accrued interest, shares | 88,463,253 | |||||
Issuance of Common Stock in connection with services rendered | $ 800 | 71,200 | 72,000 | |||
Issuance of Common Stock in connection with services rendered, shares | 8,000,000 | |||||
Net loss | (26,072,517) | (20,983) | (26,093,500) | |||
Balance at Mar. 31, 2018 | $ 11,034 | 17,443,169 | (55,469,499) | (18,042) | (38,033,338) | |
Balance, shares at Mar. 31, 2018 | 51 | 110,337,224 | ||||
Balance at Dec. 31, 2018 | $ 47,003 | 18,611,890 | (39,427,642) | (24,366) | (20,793,115) | |
Balance, shares at Dec. 31, 2018 | 51 | 470,029,589 | ||||
Issuance of Common Stock in connection with the conversion of convertible promissory notes and accrued interest | $ 10,784 | 195,757 | 206,541 | |||
Issuance of Common Stock in connection with the conversion of convertible promissory notes and accrued interest, shares | 107,844,363 | |||||
Issuance of Common Stock in connection with services rendered | $ 3,600 | 140,400 | 144,000 | |||
Issuance of Common Stock in connection with services rendered, shares | 36,000,000 | |||||
Net loss | (923,129) | (6,309) | (929,438) | |||
Balance at Mar. 31, 2019 | $ 61,387 | $ 18,948,047 | $ (40,350,771) | $ (30,675) | $ (21,372,012) | |
Balance, shares at Mar. 31, 2019 | 51 | 613,873,952 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (929,438) | $ (26,093,500) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 53,170 | 101,782 |
Stock compensation expense | 144,000 | 72,000 |
(Gain) Loss on change in fair value of derivative liabilities | (2,258,405) | 24,902,861 |
Gain on change of derivative liabilities from convertible notes payable conversions | (207,642) | |
Initial derivative liability expense | 1,549,000 | 425,600 |
Amortization of debt discount | 646,602 | 108,191 |
Amortization of deferred financing costs | 43,406 | 1,965 |
Amortization of original issue discount | 54,597 | 6,372 |
(Increase) Decrease in: | ||
Accounts receivable | 52,819 | (105,281) |
Contract assets | 56,756 | |
Inventory | (8,495) | |
Other current assets | 34,876 | 69 |
Other assets | (10,545) | |
Increase (Decrease) in: | ||
Accounts payable | 64,438 | 192,061 |
Accrued expenses | 291,628 | 389,571 |
Contract liability | (560) | (43,646) |
Net Cash Used in Operating Activities | (413,248) | (52,500) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (5,130) | |
Net Cash Used in Investing Activities | (5,130) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments of note payable | (48,563) | (118,877) |
Proceeds from convertible notes payable | 699,500 | 308,500 |
Repayments of convertible notes payable | (240,000) | |
Repayments to line of credit | (4,020) | |
Payments to related parties | (12,000) | (12,000) |
Net Cash Provided by Financing Activities | 398,937 | 173,603 |
Net (Decrease) Increase in Cash | (14,311) | 115,973 |
Cash - Beginning of Period | 101,116 | 68,437 |
Cash - End of Period | 86,805 | 184,410 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest | 6,458 | 25,420 |
Income Taxes | ||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Issuance of common stock (in connection with conversion of convertible promissory notes and accrued interest) | 206,541 | 222,440 |
Initial recognition of derivative liability as debt discount | $ 812,000 | $ 229,673 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization DirectView Holdings, Inc., (the “Company”), was incorporated in the State of Delaware on October 2, 2006. On July 6, 2012 the Company changed its domicile from Delaware and incorporated in the State of Nevada. The Company has the following six subsidiaries: DirectView Video Technologies Inc. (“DVVT”), DirectView Security Systems Inc. (“DVSS”), Ralston Communication Services Inc. (“RCI”), Meeting Technologies Inc. (“MT”), Virtual Surveillance (“VS”), and Apex CCTV, LLC (“APEX”). The Company is a full-service provider of teleconferencing services to businesses and organizations. The Company’s conferencing services enable its clients to cost-effectively conduct remote meetings by linking participants in geographically dispersed locations. The Company’s focus is to provide high value-added conferencing services to organizations such as professional service firms, investment banks, high tech companies, law firms, investor relations firms, and other domestic and multinational companies. The Company is also a provider of the latest technologies in surveillance systems, digital video recording and services. The systems provide onsite and remote video and audio surveillance. Basis of Presentation The unaudited consolidated financial statements include the accounts of the Company, five wholly-owned subsidiaries, and a subsidiary with which the Company has a majority voting interest of approximately 58% (the other 42% is owned by non-controlling interests, including 12% which is owned by the Company’s Chief Executive Officer) as of March 31, 2019. In the preparation of the unaudited consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements. The unaudited consolidated financial statements and notes included herein should be read in conjunction with the annual consolidated financial statements and notes for the year ended December 31, 2018 included in our Annual Report on Form 10-K filed with the SEC on April 12, 2019. In the opinion of management, all adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of March 31, 2019, the results of operations for the three months ending March 31, 2019, and the cash flows for the three months ending March 31, 2019, have been included. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year. Use of Estimates In preparing the unaudited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the statements of financial condition, and revenues and expenses during the reporting period. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the allowance for doubtful accounts, deferred tax asset valuation allowance, valuation of stock-based compensation, the useful life of property and equipment, valuation of beneficial conversion features on convertible debt, valuation of intangible assets and the assumptions used to calculate the fair value of derivative liabilities. Non-controlling Interests in Consolidated Financial Statements The Company follows ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements.” This statement clarifies that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the unaudited consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, the losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. As of March 31, 2019 and December 31, 2018, the Company reflected a non-controlling interest of ($30,676) and ($24,366) in connection with our majority-owned subsidiary, DirectView Security Systems Inc., as reflected in the accompanying March 31, 2019 unaudited consolidated balance sheet and December 31, 2018 consolidated balance sheet, respectively. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of March 31, 2019 and December 31, 2018 the Company had no bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits. Fair Value of Financial Instruments The Company follows FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of March 31, 2019 and December 31, 2018. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. At March 31, 2019 and December 31, 2018 there were not any cash equivalents. In addition, FASB ASC 825-10-25 Fair Value Option expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments. The carrying amounts reported in the balance sheet for cash, accounts receivable, accounts payable, accrued expenses, notes payable and due to related parties approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes and convertible promissory notes approximates the estimated fair value for these financial instruments as management believes that such notes constitute substantially all of the Company’s debt and the interest payable on the notes approximates the Company’s incremental borrowing rate. Accounts Receivable The Company has a policy of reserving for questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company uses specific identification of accounts to reserve possible uncollectible receivables. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. At March 31, 2019 and December 31, 2018, management determined that an allowance was necessary which amounted to approximately $68,000 at both dates. During the three months ended March 31, 2019 and 2018, the Company did not recognize any write-offs related to uncollectible accounts receivable. Contract Assets The Company records capitalized jobs costs on the balance sheet and expenses the costs upon completion of related jobs based on when revenue is earned. As of March 31, 2019 and December 31, 2018, the Company had $40,384 and $97,140, respectively included on its balance sheets under Contract Assets. Advertising Advertising is expensed as incurred. Advertising expense for the three months ended March 31, 2019 and 2018 was $233,746 and $198,982, respectively. Shipping costs Shipping costs are included in cost of sales for VS and Apex and shipping costs are included in other selling, general and administrative expenses for DVVS and were deemed to be not material for the three months ended March 31, 2019 and 2018, respectively. Inventory Inventory, consisting of finished goods related to our products is stated at the lower of cost or net realizable value utilizing the first-in, first-out method. The Company acquires inventory for specific installation jobs. As a result, the Company generally orders inventory only as needed for installations. Due to the anticipation of customers’ needs the Company purchased inventory items and had $117,300 and $108,805 in inventory at March 31, 2019 and December 31, 2018, respectively. Property and Equipment Property and equipment is carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful life or the term of the lease. Impairment of Long-Lived Assets Long-Lived Assets of the Company are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360-10-35-15, “Impairment or Disposal of Long-Lived Assets” Intangible Assets The Company amortizes the below identifiable intangible assets over their useful lives on a straight line basis. Customer Relationships 10 years Brand 10 years Technology 3 years Derivative Instruments We account for derivative instruments in accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. ASC 815 requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change. Effective January 1, 2018, the Company changed its method of accounting for the reduction of the derivative liability associated with convertible promissory notes at the time of partial conversion. Prior to January 1, 2018, the Company recorded such derivative liability reductions as an increase to Additional Paid-In Capital within its Consolidated Balance Sheets. Effective January 1, 2018, the Company began recording such derivative liability reductions as an increase to Other Income within its Consolidated Statements of Operations. The Company believes the new method more accurately reflects periodic results of operations and conforms to derivative liability practices predominant in the industry. Income Taxes Income taxes are accounted for under the asset and liability method as prescribed by ASC Topic 740: Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance, when in the Company’s opinion it is likely that some portion or the entire deferred tax asset will not be realized. Pursuant to ASC Topic 740-10: Income Taxes related to the accounting for uncertainty in income taxes, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. The accounting standard also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. The adoption had no effect on the Company’s consolidated financial statements. The Company’s tax returns for its December 31, 2018, 2017, 2016, 2015, 2014, 2013, 2012, and 2011 tax years may be selected for examination by the taxing authorities as the statute of limitations remains open since the Company last filed an income tax return for the December 31, 2010 tax year. The Company recognizes expenses for tax penalties and interest assessed by the Internal Revenue Service and other taxing authorities upon receiving valid notice of assessments. The Company has received no such notices as of the date of this filing. Stock Based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to Accounting Standards Update (“ASU”) 2018-07, for share-based payments to consultants and other third-parties, compensation expense is determined at the “grant date.” The expense is recognized over the service period of the award. The Company recorded stock based compensation of $144,400 and $72,000 for employees during the three months ended March 31, 2019 and 2018, respectively. Loan Costs The Company records loan costs as a debt discount which is amortized to interest expense over the terms of the note payable in accordance with ASU 2015-3 “Interest – Imputation of Interest” – Simplifying the Presentation of Debt Issuance Costs. Revenue recognition Effective January 1, 2018 (beginning of fiscal year 2018), the Company adopted the requirements of ASU 2014-09 (ASC 606) and related amendments, using the modified retrospective method. The adoption of ASC 606 did not have any impact on the Company’s consolidated financial statements. The adoption of ASC 606 did not have a significant impact on the Company’s revenue recognition policy as revenues on the substantial majority of the Company’s contracts continue to be recognized over time. In adopting ASC 606, the Company elected to use certain practical expedients permitted by the standard including electing to adopt the right-to-invoice practical expedient on certain time and material contracts where the Company recognizes revenues as it is contractually able to invoice the customer based on the control transferred to the customer. The following policies reflect specific criteria for the various revenue streams of the Company: Revenue is recognized upon transfer of control of conferencing services. The Company generally does not charge up-front fees and bills its customers based on usage. The Company has elected the practical expedient to recognized revenue “as-billed”. Revenue for video equipment sales and security surveillance equipment sales is recognized upon delivery and installation which the Company has determined is the point in time that control is transferred to the customer. Due to the nature of the Company’s business it is not practicable to return products, therefore the Company has determined that it is not necessary to estimate for sales returns and allowances. The Company’s manufacturers provide the highest quality products available. If there is a defect in a product related to materials or workmanship, the Company extends the manufacturer’s warranty to its customers. To date this process has never occurred. Therefore no warranty liability is recorded. Revenue from periodic maintenance agreements is generally recognized ratably over the respective maintenance periods provided no significant obligations remain and collectability of the related receivable is probable. Maintenance agreements are considered stand ready arrangements for which control is transferred to the customer ratably over time. Disaggregation of Revenue The Company operates in two different geographic locations and both locations have two sources of revenue; sales of product and sales of service. Service sales mainly include installation of products related to security systems. The sales of products are generally contract based and short term in nature. The following table illustrates our revenue by type related to the three months ended March 31, 2019 and 2018: Period Ended March 31, 2019 2018 Sales of Product Texas $ 461,922 $ 927,861 New York 35,724 39,196 Total Sales of Product 497,646 967,057 Services Texas 123,935 180,946 New York 4,000 53,127 Total Services 127,935 234,073 Total Net Sales $ 625,581 $ 1,201,130 Contract Balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers. March 31, 2019 December 31, 2018 Contract Assets $ 40,384 $ 97,140 Contract Liabilities $ 5,175 $ 5,735 Contract receivables are recognized when the receipt of consideration is unconditional. During the three months ended March 31, 2019, the Company recognized revenue equal to the balance of the contract liability at December 31, 2018. As a practical expedient, the Company expenses the costs of sales commissions that are paid to its sales force associated with obtaining contracts less than one year in length in the period incurred. Remaining Performance Obligations The Company typically enters into contracts that are one year or less in length. As such, the remaining performance obligations at March 31, 2019 are equal to the contract liabilities disclosed above. The Company expects to recognize the full balance of the contract liabilities at March 31, 2019 within the next year. Cost of Sales Cost of sales includes cost of products and cost of service. Product cost includes the cost of products and delivery costs. Cost of services includes labor and fuel expenses. Concentrations of Credit Risk and Major Customers Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company places its cash with high credit quality financial institutions. Almost all of the Company’s sales are credit sales which are primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk. During the three months ended March 31, 2019, two customers accounted for 42% of revenues. During the three months ended March 31, 2018, one customer accounted for 52% of revenues. At March 31, 2019, four customers accounted for 65% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the four customers: Customer 1 21 % Customer 2 16 % Customer 3 15 % Customer 4 13 % Total 65 % At December 31, 2018, two customers accounted for 71% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the two customers: Customer 1 47 % Customer 2 24 % Total 71 % Related Parties Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party. Net Income per Common Share Net income per common share is calculated in accordance with ASC Topic 260: Earnings Per Share (“ASC 260”). Basic income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net earnings per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive. At March 31, 2019 and December 31, 2018, the Company had approximately 3.1 billion and 2.8 billion share equivalents issuable pursuant to embedded conversion features, respectively. Recently Adopted Accounting Standards Effective January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)” and amendments, which improve financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. Under the new guidance, a lessee is required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current Generally Accepted Accounting Principles (GAAP), the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily depends on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the statement of assets, liabilities, and members’ equity (deficit), the new ASU requires both types of leases to be recognized on the statement of assets, liabilities, and members’ equity (deficit). The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. Effective January 1, 2019, the Company adopted Accounting Standards Update 2018-07, which reduces cost and complexity and improves financial reporting for share-based payment transactions for acquiring goods or services from nonemployees. Under this update standard, an entity applies the requirements to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. Furthermore, this update standard 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 awards. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted The Company has reviewed all recently issued, but not yet adopted, accounting pronouncements and does not expect the future adoption of any such pronouncements to have a significant impact on our consolidated financial statements, except as described below. During January 2017, the FASB issued Accounting Standards Update 2017-04, to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this updated standard, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity also should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if any. This guidance is effective prospectively and is effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted. During August 2018, the FASB issued Accounting Standards Update 2018-13, to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concept Statement, including the consideration of costs and benefits. This guidance is effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted. |
Going Concern Considerations
Going Concern Considerations | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern Considerations | NOTE 2 – GOING CONCERN CONSIDERATIONS The accompanying unaudited consolidated financial statements are prepared assuming the Company will continue as a going concern. At March 31, 2019, the Company had an accumulated deficit of approximately $40.4 million, a stockholders’ deficit of approximately $21.3 million and a working capital deficiency of approximately $21.9 million. The net cash used in operating activities for the three months ended March 31, 2019 totaled $413,248. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issue date of this report. The ability of the Company to continue as a going concern is dependent upon increasing sales and obtaining additional capital and financing. Management intends to attempt to raise funds by way of a public or private offering. While the Company believes in the viability of its strategy to increase sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s limited financial resources have prevented the Company from aggressively advertising its products and services to achieve consumer recognition. The unaudited consolidated financial statements do not include adjustments to reflect the possible effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 3 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following: Estimated life March 31, 2019 December 31, 2018 Computer Equipment 1 year $ 23,439 $ 23,438 Office Equipment 1 year 5,866 5,866 Telephone System 1 year 11,576 11,576 ERP Software 1 year 150,000 150,000 Vehicles 1 year 22,667 22,667 Furniture & Fixtures 2-3 years 2,000 2,000 Less: Accumulated depreciation (204,553 ) (203,025 ) $ 10,995 $ 12,522 For the three months ended March 31, 2019 and 2018, depreciation expense amounted to $1,528 and $50,140, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 4 – INTANGIBLE ASSETS Intangible assets other than goodwill are amortized on a straight line basis over their useful lives. Intangible assets consist of the following: March 31, 2019 December 31, 2018 Useful Lives Intangible assets: Goodwill $ 794,830 $ 794,830 Customer Relationships 95,000 95,000 10 years Brand 204,000 204,000 10 years Technology 530,000 530,000 3 years Total 1,623,830 1,623,830 Less: Accumulated amortization (404,526 ) (352,885 ) $ 1,219,304 $ 1,270,945 Amortization expense related to the intangible assets for the three months ended March 31, 2019 and 2018 was $51,642 for each period. |
Note Payable - Related Party
Note Payable - Related Party | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Note Payable - Related Party | NOTE 5 – NOTE PAYABLE - RELATED PARTY In connection with the Securities Purchase Agreement dated April 20, 2017, (the “Purchase Agreement”), whereby the Company acquired Video Surveillance, LLC and Apex CCTV, LLC, (collectively, the “Acquisition Companies”), the Company executed a non-interest bearing Note Payable – related party with an initial principal amount of $830,000. The Note Payable – related party initial principal amount of $830,000 will be reduced by the calculated cash payout of $2,000 related to the terms in this Purchase Agreement and certain payments owed in accordance with the Employment Agreement with the former sole member and equity owner of each of the Acquisition Companies (the “Seller”) in the amount of $150,000. The terms of the Employment Agreement include $50,000 annually to be paid over a three year period commencing on April 20, 2017. Upon delivery by the Company of the final note payment to the Seller related to the Employment Agreement, this Note Payable – related party shall be forfeited and cancelled and of no further force or effect, and the Company shall have no further obligations on this Note Payable – related party. No payments have been remitted pursuant to the Cash Payout as of March 31, 2019. At March 31, 2019 and December 31, 2018, the balance of this Note Payable – related party was $766,000 and $778,000, respectively. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 6 – NOTES PAYABLE During 2012, the Company entered into demand notes with Regal Capital (formerly a related party) with principal amounts totaling $116,792 bearing interest at 12% per annum. At March 31, 2019 and December 31, 2018 the notes amounted to $116,792 and $116,792, respectively. On April 20, 2017, in connection with the Purchase Agreement, the Company assumed a note payable with a balance of $1,923,896 that Video Surveillance, LLC and Apex CCTV, LLC were jointly and severally liable for with a maturity date of April 2025 and an interest rate of 4.35%. This note payable was guaranteed by the VS and Apex previous managing member and his spouse and collateralized by all of the assets of the companies acquired under the Purchase Agreement. Per the Purchase Agreement the note was to be paid within 180 days of the Effective Date, however, the Company has not complied with the payment terms. On July 27, 2018, the Company entered into a settlement with JP Morgan Chase Bank, N.A. (“Chase”) regarding payment of the outstanding balance under this note payable, known as the Promissory Note and U.S. Small Business Administration Note dated April 15, 2015 (the “Notes”) in the aggregate principal amount of approximately $1,900,000 including interest (the “Loan Amount”) between Video Surveillance LLC, Apex CCTV LLC, and Chase. According to the terms of the settlement, the Company and Chase agreed to a full and final settlement of the Loan Amount and the related transactions thereunder in exchange for payment by the Company in the amount of $475,000 on August 3, 2018 (the “Initial Payment”) and three additional payments of $475,000 each month thereafter (the “Additional Payment”). As of the date hereof, the Company has timely made the Initial and three Additional Payments to Chase. During January 2019, a final interest payment of approximately $49,000 was made to Chase, paying the Loan Amount in full. At March 31, 2019 and December 31, 2018, notes payable amounted to $116,792 and $165,355, respectively. Accrued interest on the notes payable amounted to approximately $100,540 and $97,000 as of March 31, 2019 and December 31, 2018, respectively and is included in accrued expenses. |
Short Term Advances
Short Term Advances | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Short Term Advances | NOTE 7 – SHORT TERM ADVANCES During prior years, the Company received advances from an unrelated party for operating expenses. These advances are payable in cash and are non-interest bearing and due on demand. The balance of these short term advances was $146,015 and $146,015 at March 31, 2019 and December 31, 2018, respectively. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | NOTE 8 – ACCRUED EXPENSES At March 31, 2019 and December 31, 2018, the Company had accrued expenses of $4,762,529 and $4,542,124, respectively. The following table displays the accrued expenses by category. March 31, 2019 December 31, 2018 Operating Expenses $ 213,828 $ 235,826 Employee Commissions - Interest 2,329,913 2,169,257 Salaries 2,038,931 2,029,838 Sales Tax Payable 83,679 67,610 Payroll Liabilities 96,178 39,593 $ 4,762,529 $ 4,542,124 |
Convertible Promissory Notes
Convertible Promissory Notes | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes | NOTE 9 – CONVERTIBLE PROMISSORY NOTES Convertible promissory notes consisted of the following: March 31, 2019 December 31, 2018 Secured convertible promissory notes $ 7,726,989 $ 7,362,740 Debt discount liability (2,719,679 ) (2,554,282 ) Debt discount original issue discount (254,010 ) (269,426 ) Debt discount deferred financing (245,552 ) (281,458 ) Secured convertible promissory notes, net $ 4,507,748 $ 4,257,574 During the period January 1, 2019 through March 31, 2019, the Company issued various 5% original issue discount (“OID”) convertible promissory notes with an aggregate principal balance of $846,737 with maturities of one year. These convertible debentures convert at 60% or 61% of the lowest trading price during either the 30, 20, or 10 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory notes the Company accounted for these conversion features as derivative liabilities. In connection herewith, the Company recorded an aggregate derivative liability of $812,000, OID of $34,737, deferred financing costs of $7,500, and debt discount of $812,000. The OID’s, deferred financing costs, and debt discounts are being amortized over the related term of each note. The aggregate balance of the convertible promissory notes was $846,737 at March 31, 2019. The aggregate balance of the convertible promissory notes, net of OIDs, deferred financing costs, and debt discounts, at March 31, 2019 was $110,715. During the three months ended March 31, 2019 and 2018, amortization of debt discount amounted to $646,602 and $108,191, respectively. |
Derivative Liability
Derivative Liability | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | NOTE 10 – DERIVATIVE LIABILITY The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operation as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from December 31, 2017 to March 31, 2019: Conversion feature derivative liability Balance at December 31, 2017 $ 3,953,369 Initial fair value of derivative liability recorded as debt discount 4,667,665 Initial fair value of derivative liability charged to other expense 2,468,667 Gain on change of derivative liabilities from convertible notes payable conversions (2,507,705 ) Loss on change in fair value included in earnings 3,377,004 Balance at December 31, 2018 $ 11,959,000 Initial fair value of derivative liability recorded as debt discount 812,000 Initial fair value of derivative liability charged to other expense 1,549,000 Gain on change of derivative liabilities from convertible notes payable conversions (207,642 ) Gain on change in fair value included in earnings (2,258,405 ) Balance at March 31, 2019 $ 11,853,953 Total derivative liability at March 31, 2019 and December 31, 2018 amounted to $11,853,953 and $11,959,000, respectively. The change in fair value included in earnings of $2,258,405 is due in part to the quoted market price of the Company’s common stock increasing from $0.0034 at December 31, 2018 to $0.0044 at March 31, 2019, coupled with substantially reduced conversion prices due to the effect of “ratchet” provisions incorporated within the convertible notes payable. The Company used the following assumptions for determining the fair value of the convertible instruments granted under the binomial pricing model with Monte Carlo simulations at March 31, 2019: Expected volatility 116% - 216 % Expected term 3 – 20 months Risk-free interest rate 2.27% - 2.45 % Stock price $ 0.0044 |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 11 - STOCKHOLDERS’ DEFICIT The Series A Preferred Stock has no dividend rights, no liquidation rights and no redemption rights, and was created primarily to be able to obtain a quorum and conduct business at shareholder meetings. All shares of the Series A Preferred Stock shall rank (i) senior to the Company’s common stock and any other class or series of capital stock of the Company hereafter created, (ii) pari passu During February 2019, the Company filed a Registration Statement on Form S-8 to register with the U.S. Securities and Exchange Commission 48,000,000 shares of the Company’s common stock, which may be issued by the Company upon the exercise of options granted, or other awards made, pursuant to the terms of the 2019 Incentive Plan. During February 2019, the Company issued 26,000,000 shares of common stock at the fair market value rate of $0.004 totaling $104,000 to the Company’s Chief Financial Officer for services rendered. The Company also issued 10,000,000 shares of common stock at the fair market value rate of $0.004 totaling $40,000 to an employee for services rendered. Both issuances were from the 48,000,000 shares of the Company’s common stock as registered on Form S-8 on February 19, 2019. During March 2019, the Company entered into an Equity Purchase Agreement (“Equity Purchase Agreement”) and Registration Rights Agreement (“Registration Rights Agreement”) with Oasis Capital, LLC, a Puerto Rico limited liability company (“Oasis”). Under the terms of the Equity Purchase Agreement, Oasis agreed to purchase from the Company up to $5,000,000 of the Company’s common stock upon effectiveness of a registration statement on Form S-1 (the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “Commission”) and subject to certain limitations and conditions set forth in the Equity Purchase Agreement. Following effectiveness of the Registration Statement, and subject to certain limitations and conditions set forth in the Equity Purchase Agreement, the Company shall have the discretion to deliver put notices to Oasis and Oasis will be obligated to purchase shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) based on the investment amount specified in each put notice. The maximum amount that the Company shall be entitled to put to Oasis in each put notice shall not exceed the lesser of $1,000,000 or one hundred percent (100%) of the average daily trading volume of the Company’s Common Stock during the ten (10) trading days preceding the put. Pursuant to the Equity Purchase Agreement, Oasis and its affiliates will not be permitted to purchase and the Company may not put shares of the Company’s Common Stock to Oasis that would result in Oasis’s beneficial ownership of the Company’s outstanding Common Stock exceeding 9.99%. The price of each put share shall be equal to eighty five percent (85%) of the Market Price (as defined in the Equity Purchase Agreement). Puts may be delivered by the Company to Oasis until the earlier of (i) the date on which Oasis has purchased an aggregate of $5,000,000 worth of Common Stock under the terms of the Equity Purchase Agreement, (ii) March 22, 2022, or (iii) written notice of termination delivered by the Company to Oasis, subject to certain equity conditions set forth in the Equity Purchase Agreement. In connection with its entry into the Equity Purchase Agreement and the Registration Rights Agreement, the Company agreed to issue Commitment Shares (as defined in the Equity Purchase Agreement) to Oasis. During March 2019, the Company’s Chief Executive Officer agreed to convert approximately $1,800,000 in debt owed to him from the Company, consisting of money he invested and accrued compensation, into preferred shares of equity of the Company. At March 31, 2019, the agreed upon conversion had not yet occurred. During the three months ended March 31, 2019, the Company issued 107,844,363 shares of common stock at contractual rates ranging from $0.0018 to $0.0023 for the conversion of $189,200 in principal and $17,341 in accrued interest of convertible notes payable. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 12 - RELATED PARTY TRANSACTIONS Due to Related Parties At March 31, 2019 and December 31, 2018, the Company had a payable to its Chief Executive Officer amounting to $1,814. The amount is considered short-term in nature and non-interest bearing. Note Payable – related party The following related party transactions have been presented on the balance sheet in Note Payable – related party. In connection with the Securities Purchase Agreement dated April 20, 2017, the Company executed a non-interest bearing note payable in the amount of $830,000, as further described in Note 5. During the three months ended March 31, 2019, the Company paid $12,000 related to this note payable. At March 31, 2019 and December 31, 2018, the balance of this note payable was $766,000 and $778,000, respectively. |
Barter Revenue
Barter Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Revenue Disclosure [Abstract] | |
Barter Revenue | NOTE 13 – BARTER REVENUE The Company provides security systems and associated installation labor in exchange for business services. The Company recognizes revenue from these barter transactions when security systems are installed and recognizes deferred barter costs as other current assets until the barter transaction is completed and then recognizes the appropriate expense. The barter revenue is valued at the fair market value which is the selling price we sell to other third parties. There was no barter revenue for the three months ended March 31, 2019 or March 31, 2018. |
Accrued Payroll Taxes
Accrued Payroll Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Payroll Taxes | NOTE 14 - ACCRUED PAYROLL TAXES At March 31, 2019, the Company maintained a liability related to current and certain unpaid payroll taxes of approximately $96,000, of which approximately $81,000 relates to current payroll taxes and approximately $15,000 relates to certain unpaid payroll taxes and includes interest and penalties. Although the Company has not received any notices from the IRS related to the unpaid payroll taxes, the Company confirmed the outstanding balances with the IRS. At December 31, 2018 the Company had approximately $40,000 recorded as a liability related to this matter. Such amounts are included in accrued expenses in the accompanying unaudited consolidated financial statements. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | NOTE 15 – COMMITMENTS Leases: The Company’s current office space was leased under a four year term which ended March 31, 2019. Prior to the expiration of the lease, the Company executed an extension for 60 days which began April 1, 2019, and continues month-to-month until the Company provides an advance 30-day termination notification. The monthly rent under the extension is $12,319. Rent expense for the three months ended March 31, 2019 and 2018 was $34,113 and $34,114, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 16 – SUBSEQUENT EVENTS Subsequent to March 31, 2019, the Company issued 5% OID convertible promissory notes with principal balances totaling approximately $240,000 with maturity dates of one year. These convertible debentures convert at 60% of the lowest trading price during the 30 days prior to conversions. Subsequent to March 31, 2019, the Company issued 64,226,044 shares of common stock upon conversion of approximately $100,000 of convertible promissory notes and approximately $34,000 of accrued interest. These notes were converted at contractual rates ranging from $0.00204 to $0.00216. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Organization | Organization DirectView Holdings, Inc., (the “Company”), was incorporated in the State of Delaware on October 2, 2006. On July 6, 2012 the Company changed its domicile from Delaware and incorporated in the State of Nevada. The Company has the following six subsidiaries: DirectView Video Technologies Inc. (“DVVT”), DirectView Security Systems Inc. (“DVSS”), Ralston Communication Services Inc. (“RCI”), Meeting Technologies Inc. (“MT”), Virtual Surveillance (“VS”), and Apex CCTV, LLC (“APEX”). The Company is a full-service provider of teleconferencing services to businesses and organizations. The Company’s conferencing services enable its clients to cost-effectively conduct remote meetings by linking participants in geographically dispersed locations. The Company’s focus is to provide high value-added conferencing services to organizations such as professional service firms, investment banks, high tech companies, law firms, investor relations firms, and other domestic and multinational companies. The Company is also a provider of the latest technologies in surveillance systems, digital video recording and services. The systems provide onsite and remote video and audio surveillance. |
Basis of Presentation | Basis of Presentation The unaudited consolidated financial statements include the accounts of the Company, five wholly-owned subsidiaries, and a subsidiary with which the Company has a majority voting interest of approximately 58% (the other 42% is owned by non-controlling interests, including 12% which is owned by the Company’s Chief Executive Officer) as of March 31, 2019. In the preparation of the unaudited consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements. The unaudited consolidated financial statements and notes included herein should be read in conjunction with the annual consolidated financial statements and notes for the year ended December 31, 2018 included in our Annual Report on Form 10-K filed with the SEC on April 12, 2019. In the opinion of management, all adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of March 31, 2019, the results of operations for the three months ending March 31, 2019, and the cash flows for the three months ending March 31, 2019, have been included. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year. |
Use of Estimates | Use of Estimates In preparing the unaudited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the statements of financial condition, and revenues and expenses during the reporting period. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the allowance for doubtful accounts, deferred tax asset valuation allowance, valuation of stock-based compensation, the useful life of property and equipment, valuation of beneficial conversion features on convertible debt, valuation of intangible assets and the assumptions used to calculate the fair value of derivative liabilities. |
Non-controlling Interests in Consolidated Financial Statements | Non-controlling Interests in Consolidated Financial Statements The Company follows ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements.” This statement clarifies that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the unaudited consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, the losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. As of March 31, 2019 and December 31, 2018, the Company reflected a non-controlling interest of ($30,676) and ($24,366) in connection with our majority-owned subsidiary, DirectView Security Systems Inc., as reflected in the accompanying March 31, 2019 unaudited consolidated balance sheet and December 31, 2018 consolidated balance sheet, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of March 31, 2019 and December 31, 2018 the Company had no bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of March 31, 2019 and December 31, 2018. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. At March 31, 2019 and December 31, 2018 there were not any cash equivalents. In addition, FASB ASC 825-10-25 Fair Value Option expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments. The carrying amounts reported in the balance sheet for cash, accounts receivable, accounts payable, accrued expenses, notes payable and due to related parties approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes and convertible promissory notes approximates the estimated fair value for these financial instruments as management believes that such notes constitute substantially all of the Company’s debt and the interest payable on the notes approximates the Company’s incremental borrowing rate. |
Accounts Receivable | Accounts Receivable The Company has a policy of reserving for questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company uses specific identification of accounts to reserve possible uncollectible receivables. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. At March 31, 2019 and December 31, 2018, management determined that an allowance was necessary which amounted to approximately $68,000 at both dates. During the three months ended March 31, 2019 and 2018, the Company did not recognize any write-offs related to uncollectible accounts receivable. |
Contract Assets | Contract Assets The Company records capitalized jobs costs on the balance sheet and expenses the costs upon completion of related jobs based on when revenue is earned. As of March 31, 2019 and December 31, 2018, the Company had $40,384 and $97,140, respectively included on its balance sheets under Contract Assets. |
Advertising | Advertising Advertising is expensed as incurred. Advertising expense for the three months ended March 31, 2019 and 2018 was $233,746 and $198,982, respectively. |
Shipping Costs | Shipping costs Shipping costs are included in cost of sales for VS and Apex and shipping costs are included in other selling, general and administrative expenses for DVVS and were deemed to be not material for the three months ended March 31, 2019 and 2018, respectively. |
Inventory | Inventory Inventory, consisting of finished goods related to our products is stated at the lower of cost or net realizable value utilizing the first-in, first-out method. The Company acquires inventory for specific installation jobs. As a result, the Company generally orders inventory only as needed for installations. Due to the anticipation of customers’ needs the Company purchased inventory items and had $117,300 and $108,805 in inventory at March 31, 2019 and December 31, 2018, respectively. |
Property and Equipment | Property and Equipment Property and equipment is carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful life or the term of the lease. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-Lived Assets of the Company are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360-10-35-15, “Impairment or Disposal of Long-Lived Assets” |
Intangible Assets | Intangible Assets The Company amortizes the below identifiable intangible assets over their useful lives on a straight line basis. Customer Relationships 10 years Brand 10 years Technology 3 years |
Derivative Instruments | Derivative Instruments We account for derivative instruments in accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. ASC 815 requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change. Effective January 1, 2018, the Company changed its method of accounting for the reduction of the derivative liability associated with convertible promissory notes at the time of partial conversion. Prior to January 1, 2018, the Company recorded such derivative liability reductions as an increase to Additional Paid-In Capital within its Consolidated Balance Sheets. Effective January 1, 2018, the Company began recording such derivative liability reductions as an increase to Other Income within its Consolidated Statements of Operations. The Company believes the new method more accurately reflects periodic results of operations and conforms to derivative liability practices predominant in the industry. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method as prescribed by ASC Topic 740: Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance, when in the Company’s opinion it is likely that some portion or the entire deferred tax asset will not be realized. Pursuant to ASC Topic 740-10: Income Taxes related to the accounting for uncertainty in income taxes, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. The accounting standard also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. The adoption had no effect on the Company’s consolidated financial statements. The Company’s tax returns for its December 31, 2018, 2017, 2016, 2015, 2014, 2013, 2012, and 2011 tax years may be selected for examination by the taxing authorities as the statute of limitations remains open since the Company last filed an income tax return for the December 31, 2010 tax year. The Company recognizes expenses for tax penalties and interest assessed by the Internal Revenue Service and other taxing authorities upon receiving valid notice of assessments. The Company has received no such notices as of the date of this filing. |
Stock Based Compensation | Stock Based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to Accounting Standards Update (“ASU”) 2018-07, for share-based payments to consultants and other third-parties, compensation expense is determined at the “grant date.” The expense is recognized over the service period of the award. The Company recorded stock based compensation of $144,400 and $72,000 for employees during the three months ended March 31, 2019 and 2018, respectively. |
Loan Costs | Loan Costs The Company records loan costs as a debt discount which is amortized to interest expense over the terms of the note payable in accordance with ASU 2015-3 “Interest – Imputation of Interest” – Simplifying the Presentation of Debt Issuance Costs. |
Revenue Recognition | Revenue recognition Effective January 1, 2018 (beginning of fiscal year 2018), the Company adopted the requirements of ASU 2014-09 (ASC 606) and related amendments, using the modified retrospective method. The adoption of ASC 606 did not have any impact on the Company’s consolidated financial statements. The adoption of ASC 606 did not have a significant impact on the Company’s revenue recognition policy as revenues on the substantial majority of the Company’s contracts continue to be recognized over time. In adopting ASC 606, the Company elected to use certain practical expedients permitted by the standard including electing to adopt the right-to-invoice practical expedient on certain time and material contracts where the Company recognizes revenues as it is contractually able to invoice the customer based on the control transferred to the customer. The following policies reflect specific criteria for the various revenue streams of the Company: Revenue is recognized upon transfer of control of conferencing services. The Company generally does not charge up-front fees and bills its customers based on usage. The Company has elected the practical expedient to recognized revenue “as-billed”. Revenue for video equipment sales and security surveillance equipment sales is recognized upon delivery and installation which the Company has determined is the point in time that control is transferred to the customer. Due to the nature of the Company’s business it is not practicable to return products, therefore the Company has determined that it is not necessary to estimate for sales returns and allowances. The Company’s manufacturers provide the highest quality products available. If there is a defect in a product related to materials or workmanship, the Company extends the manufacturer’s warranty to its customers. To date this process has never occurred. Therefore no warranty liability is recorded. Revenue from periodic maintenance agreements is generally recognized ratably over the respective maintenance periods provided no significant obligations remain and collectability of the related receivable is probable. Maintenance agreements are considered stand ready arrangements for which control is transferred to the customer ratably over time. Disaggregation of Revenue The Company operates in two different geographic locations and both locations have two sources of revenue; sales of product and sales of service. Service sales mainly include installation of products related to security systems. The sales of products are generally contract based and short term in nature. The following table illustrates our revenue by type related to the three months ended March 31, 2019 and 2018: Period Ended March 31, 2019 2018 Sales of Product Texas $ 461,922 $ 927,861 New York 35,724 39,196 Total Sales of Product 497,646 967,057 Services Texas 123,935 180,946 New York 4,000 53,127 Total Services 127,935 234,073 Total Net Sales $ 625,581 $ 1,201,130 Contract Balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers. March 31, 2019 December 31, 2018 Contract Assets $ 40,384 $ 97,140 Contract Liabilities $ 5,175 $ 5,735 Contract receivables are recognized when the receipt of consideration is unconditional. During the three months ended March 31, 2019, the Company recognized revenue equal to the balance of the contract liability at December 31, 2018. As a practical expedient, the Company expenses the costs of sales commissions that are paid to its sales force associated with obtaining contracts less than one year in length in the period incurred. |
Remaining Performance Obligations | Remaining Performance Obligations The Company typically enters into contracts that are one year or less in length. As such, the remaining performance obligations at March 31, 2019 are equal to the contract liabilities disclosed above. The Company expects to recognize the full balance of the contract liabilities at March 31, 2019 within the next year. |
Cost of Sales | Cost of Sales Cost of sales includes cost of products and cost of service. Product cost includes the cost of products and delivery costs. Cost of services includes labor and fuel expenses. |
Concentrations of Credit Risk and Major Customers | Concentrations of Credit Risk and Major Customers Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company places its cash with high credit quality financial institutions. Almost all of the Company’s sales are credit sales which are primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk. During the three months ended March 31, 2019, two customers accounted for 42% of revenues. During the three months ended March 31, 2018, one customer accounted for 52% of revenues. At March 31, 2019, four customers accounted for 65% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the four customers: Customer 1 21 % Customer 2 16 % Customer 3 15 % Customer 4 13 % Total 65 % At December 31, 2018, two customers accounted for 71% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the two customers: Customer 1 47 % Customer 2 24 % Total 71 % |
Related Parties | Related Parties Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party. |
Net Income Per Common Share | Net Income per Common Share Net income per common share is calculated in accordance with ASC Topic 260: Earnings Per Share (“ASC 260”). Basic income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net earnings per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive. At March 31, 2019 and December 31, 2018, the Company had approximately 3.1 billion and 2.8 billion share equivalents issuable pursuant to embedded conversion features, respectively. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Effective January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)” and amendments, which improve financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. Under the new guidance, a lessee is required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current Generally Accepted Accounting Principles (GAAP), the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily depends on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the statement of assets, liabilities, and members’ equity (deficit), the new ASU requires both types of leases to be recognized on the statement of assets, liabilities, and members’ equity (deficit). The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. Effective January 1, 2019, the Company adopted Accounting Standards Update 2018-07, which reduces cost and complexity and improves financial reporting for share-based payment transactions for acquiring goods or services from nonemployees. Under this update standard, an entity applies the requirements to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. Furthermore, this update standard 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 awards. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. |
Recent Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted The Company has reviewed all recently issued, but not yet adopted, accounting pronouncements and does not expect the future adoption of any such pronouncements to have a significant impact on our consolidated financial statements, except as described below. During January 2017, the FASB issued Accounting Standards Update 2017-04, to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this updated standard, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity also should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if any. This guidance is effective prospectively and is effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted. During August 2018, the FASB issued Accounting Standards Update 2018-13, to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concept Statement, including the consideration of costs and benefits. This guidance is effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Intangible Assets Useful Lives | The Company amortizes the below identifiable intangible assets over their useful lives on a straight line basis. Customer Relationships 10 years Brand 10 years Technology 3 years |
Schedule of Disaggregation of Revenue | The following table illustrates our revenue by type related to the three months ended March 31, 2019 and 2018: Period Ended March 31, 2019 2018 Sales of Product Texas $ 461,922 $ 927,861 New York 35,724 39,196 Total Sales of Product 497,646 967,057 Services Texas 123,935 180,946 New York 4,000 53,127 Total Services 127,935 234,073 Total Net Sales $ 625,581 $ 1,201,130 |
Schedule of Contract Balances | The following table provides information about receivables, contract assets and contract liabilities from contracts with customers. March 31, 2019 December 31, 2018 Contract Assets $ 40,384 $ 97,140 Contract Liabilities $ 5,175 $ 5,735 |
Schedule of Concentrations of Credit Risk and Major Customers | At March 31, 2019, four customers accounted for 65% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the four customers: Customer 1 21 % Customer 2 16 % Customer 3 15 % Customer 4 13 % Total 65 % At December 31, 2018, two customers accounted for 71% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the two customers: Customer 1 47 % Customer 2 24 % Total 71 % |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: Estimated life March 31, 2019 December 31, 2018 Computer Equipment 1 year $ 23,439 $ 23,438 Office Equipment 1 year 5,866 5,866 Telephone System 1 year 11,576 11,576 ERP Software 1 year 150,000 150,000 Vehicles 1 year 22,667 22,667 Furniture & Fixtures 2-3 years 2,000 2,000 Less: Accumulated depreciation (204,553 ) (203,025 ) $ 10,995 $ 12,522 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following: March 31, 2019 December 31, 2018 Useful Lives Intangible assets: Goodwill $ 794,830 $ 794,830 Customer Relationships 95,000 95,000 10 years Brand 204,000 204,000 10 years Technology 530,000 530,000 3 years Total 1,623,830 1,623,830 Less: Accumulated amortization (404,526 ) (352,885 ) $ 1,219,304 $ 1,270,945 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | The following table displays the accrued expenses by category. March 31, 2019 December 31, 2018 Operating Expenses $ 213,828 $ 235,826 Employee Commissions - Interest 2,329,913 2,169,257 Salaries 2,038,931 2,029,838 Sales Tax Payable 83,679 67,610 Payroll Liabilities 96,178 39,593 $ 4,762,529 $ 4,542,124 |
Convertible Promissory Notes (T
Convertible Promissory Notes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Promissory Notes | Convertible promissory notes consisted of the following: March 31, 2019 December 31, 2018 Secured convertible promissory notes $ 7,726,989 $ 7,362,740 Debt discount liability (2,719,679 ) (2,554,282 ) Debt discount original issue discount (254,010 ) (269,426 ) Debt discount deferred financing (245,552 ) (281,458 ) Secured convertible promissory notes, net $ 4,507,748 $ 4,257,574 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Reconciliation of Derivative Liability Measured at Fair Value Recurring Basis Using Significant Unobservable Inputs | The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from December 31, 2017 to March 31, 2019: Conversion feature derivative liability Balance at December 31, 2017 $ 3,953,369 Initial fair value of derivative liability recorded as debt discount 4,667,665 Initial fair value of derivative liability charged to other expense 2,468,667 Gain on change of derivative liabilities from convertible notes payable conversions (2,507,705 ) Loss on change in fair value included in earnings 3,377,004 Balance at December 31, 2018 $ 11,959,000 Initial fair value of derivative liability recorded as debt discount 812,000 Initial fair value of derivative liability charged to other expense 1,549,000 Gain on change of derivative liabilities from convertible notes payable conversions (207,642 ) Gain on change in fair value included in earnings (2,258,405 ) Balance at March 31, 2019 $ 11,853,953 |
Assumptions for Determining Fair Value of Convertible Instruments | The Company used the following assumptions for determining the fair value of the convertible instruments granted under the binomial pricing model with Monte Carlo simulations at March 31, 2019: Expected volatility 116% - 216 % Expected term 3 – 20 months Risk-free interest rate 2.27% - 2.45 % Stock price $ 0.0044 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Non-controlling interest | $ (30,675) | $ (24,366) | |
Cash, FDIC insured amount | 250,000 | 250,000 | |
Cash equivalents | |||
Allowance for accounts receivable | 68,000 | 68,000 | |
Expenses related to uncollectible accounts receivable | |||
Contract Assets | 40,384 | 40,384 | 97,140 |
Advertising expenses | 233,746 | 198,982 | |
Inventory on hand | 117,300 | $ 108,805 | |
Impairment charges | |||
Income tax benefit likelihood of being realized upon ultimate settlement percentage | greater than 50% | ||
Stock based compensation | $ 144,000 | $ 72,000 | |
Embedded conversion features | 3,100,000,000 | 2,800,000,000 | |
Revenue [Member] | Two Customers [Member] | |||
Concentration risk percentage | 42.00% | ||
Revenue [Member] | One Customer [Member] | |||
Concentration risk percentage | 52.00% | ||
Accounts Receivable [Member] | |||
Concentration risk percentage | 65.00% | 71.00% | |
Accounts Receivable [Member] | Two Customers [Member] | |||
Concentration risk percentage | 71.00% | ||
Accounts Receivable [Member] | Four Customers [Member] | |||
Concentration risk percentage | 65.00% | ||
Non-Controlling Interest [Member] | |||
Majority voting interest rate | 42.00% | ||
Non-Controlling Interest [Member] | Chief Executive Officer [Member] | |||
Majority voting interest rate | 12.00% | ||
Subsidiaries [Member] | |||
Majority voting interest rate | 58.00% |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Intangible Assets Useful Lives (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Customer Relationships [Member] | |
Intangible assets, useful life | 10 years |
Brand [Member] | |
Intangible assets, useful life | 10 years |
Technology [Member] | |
Intangible assets, useful life | 3 years |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Total Net Sales | $ 625,581 | $ 1,201,130 |
Sales of Product [Member] | ||
Total Net Sales | 497,646 | 967,057 |
Sales of Product [Member] | Texas [Member] | ||
Total Net Sales | 461,922 | 927,861 |
Sales of Product [Member] | New York [Member] | ||
Total Net Sales | 35,724 | 39,196 |
Services [Member] | ||
Total Net Sales | 127,935 | 234,073 |
Services [Member] | Texas [Member] | ||
Total Net Sales | 123,935 | 180,946 |
Services [Member] | New York [Member] | ||
Total Net Sales | $ 4,000 | $ 53,127 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Contract Balances (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Accounting Policies [Abstract] | |||
Contract Assets | $ 40,384 | $ 97,140 | $ 40,384 |
Contract Liability | $ 5,175 | $ 5,735 | $ 5,175 |
Basis of Presentation and Sum_8
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Concentrations of Credit Risk and Major Customers (Details) - Accounts Receivable [Member] | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Concentrations of Credit Risk and Major Customers | 65.00% | 71.00% |
Customer 1 [Member] | ||
Concentrations of Credit Risk and Major Customers | 21.00% | 47.00% |
Customer 2 [Member] | ||
Concentrations of Credit Risk and Major Customers | 16.00% | 24.00% |
Customer 3 [Member] | ||
Concentrations of Credit Risk and Major Customers | 15.00% | |
Customer 4 [Member] | ||
Concentrations of Credit Risk and Major Customers | 13.00% |
Going Concern Considerations (D
Going Concern Considerations (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Accumulated deficit | $ (40,350,771) | $ (39,427,642) | ||
Stockholders' deficit | (21,372,012) | $ (38,033,338) | $ (20,793,115) | $ (12,233,728) |
Working capital deficiency | (21,900,000) | |||
Net cash used in operating activities | $ (413,248) | $ (52,500) |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1,528 | $ 50,140 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Less: Accumulated depreciation | $ (204,553) | $ (203,025) |
Property and Equipment Net | 10,995 | 12,522 |
Computer Equipment [Member] | ||
Property and equipment, gross | $ 23,439 | 23,438 |
Estimated Life | 1 year | |
Office Equipment [Member] | ||
Property and equipment, gross | $ 5,866 | 5,866 |
Estimated Life | 1 year | |
Telephone System [Member] | ||
Property and equipment, gross | $ 11,576 | 11,576 |
Estimated Life | 1 year | |
ERP Software [Member] | ||
Property and equipment, gross | $ 150,000 | 150,000 |
Estimated Life | 1 year | |
Vehicles [Member] | ||
Property and equipment, gross | $ 22,667 | 22,667 |
Estimated Life | 1 year | |
Furniture & Fixtures [Member] | ||
Property and equipment, gross | $ 2,000 | $ 2,000 |
Furniture & Fixtures [Member] | Minimum [Member] | ||
Estimated Life | 2 years | |
Furniture & Fixtures [Member] | Maximum [Member] | ||
Estimated Life | 3 years |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense of intangible assets | $ 51,642 | $ 51,642 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
Intangible assets, net | $ 424,474 | $ 476,115 | |
Customer Relationships [Member] | |||
Intangible assets useful lives | 10 years | ||
Brand [Member] | |||
Intangible assets useful lives | 10 years | ||
Technology [Member] | |||
Intangible assets useful lives | 3 years | ||
Purchase Agreement [Member] | |||
Total | $ 1,623,830 | 1,623,830 | |
Less: Accumulated amortization | (404,526) | (352,885) | |
Intangible assets, net | 1,219,304 | 1,270,945 | |
Purchase Agreement [Member] | Goodwill [Member] | |||
Total | 794,830 | $ 794,830 | |
Purchase Agreement [Member] | Customer Relationships [Member] | |||
Total | $ 95,000 | 95,000 | |
Intangible assets useful lives | 10 years | ||
Purchase Agreement [Member] | Brand [Member] | |||
Total | $ 204,000 | 204,000 | |
Intangible assets useful lives | 10 years | ||
Purchase Agreement [Member] | Technology [Member] | |||
Total | $ 530,000 | $ 530,000 | |
Intangible assets useful lives | 3 years |
Note Payable - Related Party (D
Note Payable - Related Party (Details Narrative) - USD ($) | Apr. 20, 2017 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Short term notes payable to related party | $ 52,000 | $ 52,000 | ||
Note payable, related party | 766,000 | $ 778,000 | ||
Purchase Agreement [Member] | ||||
Short term notes payable to related party | $ 830,000 | 766,000 | $ 778,000 | |
Debt instrument, payment terms | The Note Payable - related party initial principal amount of $830,000 will be reduced by the calculated cash payout of $2,000 related to the terms in this Purchase Agreement and certain payments owed in the amount of $150,000, which are to be paid $50,000 annually over a three year period. | |||
Calculated cash payout | $ 2,000 | |||
Business combination, consideration | 150,000 | |||
Debt instrument, periodic payment | $ 50,000 | |||
Repayment of debt |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Aug. 03, 2018 | Apr. 20, 2017 | Jan. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jul. 27, 2018 | Dec. 31, 2012 |
Note payable balance | $ 116,792 | $ 165,355 | |||||
Accrued interest on notes payable | 100,540 | 97,000 | |||||
Purchase Agreement [Member] | |||||||
Note payable balance | $ 1,923,896 | ||||||
Note payable mature date | Apr. 30, 2025 | ||||||
Note payable bears interest rate | 4.35% | ||||||
Debt periodic payments | $ 50,000 | ||||||
Regal Capital [Member] | |||||||
Demand notes | $ 116,792 | $ 116,792 | $ 116,792 | ||||
Demand notes bearing interest rate | 12.00% | ||||||
JP Morgan Chase Bank, N.A [Member] | Promissory Note and U.S. Small Business Administration Note [Member] | |||||||
Promissory note, principal balance | $ 1,900,000 | ||||||
JP Morgan Chase Bank, N.A [Member] | Promissory Note and U.S. Small Business Administration Note [Member] | Initial Payment [Member] | |||||||
Debt periodic payments | $ 475,000 | ||||||
JP Morgan Chase Bank, N.A [Member] | Promissory Note and U.S. Small Business Administration Note [Member] | Additional Payment One [Member] | |||||||
Debt periodic payments | 475,000 | ||||||
JP Morgan Chase Bank, N.A [Member] | Promissory Note and U.S. Small Business Administration Note [Member] | Additional Payment Two [Member] | |||||||
Debt periodic payments | 475,000 | ||||||
JP Morgan Chase Bank, N.A [Member] | Promissory Note and U.S. Small Business Administration Note [Member] | Additional Payment Three [Member] | |||||||
Debt periodic payments | $ 475,000 | ||||||
JP Morgan Chase Bank, N.A [Member] | Promissory Note and U.S. Small Business Administration Note [Member] | Final Interest Payment [Member] | |||||||
Debt periodic payments | $ 49,000 |
Short Term Advances (Details Na
Short Term Advances (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Short term advances | $ 146,015 | $ 146,015 |
Accrued Expenses (Details Narra
Accrued Expenses (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued expenses | $ 4,762,529 | $ 4,542,124 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Operating Expenses | $ 213,828 | $ 235,826 |
Employee Commissions | ||
Interest | 2,329,913 | 2,169,257 |
Salaries | 2,038,931 | 2,029,838 |
Sales Tax Payable | 83,679 | 67,610 |
Payroll Liabilities | 96,178 | 39,593 |
Total | $ 4,762,529 | $ 4,542,124 |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Original issue discount | $ 206,541 | $ 222,440 |
Amortization of debt discount | $ 646,602 | $ 108,191 |
Convertible Debentures [Member] | ||
Original issue of discount percentage | 5.00% | |
Convertible promissory note | $ 846,737 | |
Convertible debenture, term | These convertible debentures convert at 60% or 61% of the lowest trading price during either the 30, 20, or 10 days prior to conversion. | |
Derivative liability | $ 812,000 | |
Original issue discount | 34,737 | |
Deferred financing cost | 7,500 | |
Convertible promissory note, net | $ 110,715 | |
Convertible Debentures [Member] | Minimum [Member] | ||
Percentage of convertible debenture converts at lower price rate | 60.00% | |
Convertible Debentures [Member] | Maximum [Member] | ||
Percentage of convertible debenture converts at lower price rate | 61.00% |
Convertible Promissory Notes -
Convertible Promissory Notes - Schedule of Convertible Promissory Notes (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Secured convertible promissory notes | $ 7,726,989 | $ 7,362,740 |
Debt discount liability | (2,719,679) | (2,554,282) |
Debt discount original issue discount | (254,010) | (269,426) |
Debt discount deferred financing | (245,552) | (281,458) |
Secured convertible promissory notes, net | $ 4,507,748 | $ 4,257,574 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability | $ 11,853,953 | $ 11,959,000 |
Change in fair value included in earnings | $ 2,258,405 | |
Change in quoted market price of common stock | $ 0.0044 | $ 0.0034 |
Derivative Liability - Reconcil
Derivative Liability - Reconciliation of Derivative Liability Measured at Fair Value Recurring Basis Using Significant Unobservable Inputs (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Conversion feature derivative liability, Beginning | $ 11,959,000 | $ 3,953,369 |
Initial fair value of derivative liability recorded as debt discount | 812,000 | 4,667,665 |
Initial fair value of derivative liability charged to other expense | 1,549,000 | 2,468,667 |
Gain on change of derivative liabilities from convertible notes payable conversions | (207,642) | (2,507,705) |
(Gain) loss on change in fair value included in earnings | (2,258,405) | 3,377,004 |
Conversion feature derivative liability, Ending | $ 11,853,953 | $ 11,959,000 |
Derivative Liability - Assumpti
Derivative Liability - Assumptions for Determining Fair Value of Convertible Instruments (Details) (USD $) | 3 Months Ended |
Mar. 31, 2019$ / shares | |
Measurement Input, Price Volatility [Member] | Minimum [Member] | |
Derivative liability, measurement input | 1.16 |
Measurement Input, Price Volatility [Member] | Maximum [Member] | |
Derivative liability, measurement input | 2.16 |
Measurement Input, Expected Term [Member] | Minimum [Member] | |
Derivative liability, term | 3 months |
Measurement Input, Expected Term [Member] | Maximum [Member] | |
Derivative liability, term | 20 months |
Measurement Input, Risk-Free Interest Rate [Member] | Minimum [Member] | |
Derivative liability, measurement input | 0.0227 |
Measurement Input, Risk-Free Interest Rate [Member] | Maximum [Member] | |
Derivative liability, measurement input | 0.0245 |
Measurement Input, Stock Price [Member] | |
Derivative liability, measurement input | 0.0044 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2019 | Feb. 28, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Shares issued for services | $ 144,000 | $ 72,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Conversion of debt | $ 206,541 | $ 221,890 | |||
Convertible notes payable | $ 4,507,748 | 4,507,748 | $ 4,257,574 | ||
Accrued interest | 100,540 | 100,540 | $ 97,000 | ||
Convertible Notes Payable [Member] | |||||
Convertible notes payable | 189,200 | 189,200 | |||
Accrued interest | $ 17,341 | $ 17,341 | |||
Convertible Notes Payable [Member] | Minimum [Member] | |||||
Common shares conversion price | $ 0.0018 | $ 0.0018 | |||
Convertible Notes Payable [Member] | Maximum [Member] | |||||
Common shares conversion price | $ 0.0023 | $ 0.0023 | |||
Common Stock [Member] | |||||
Shares issued for services, shares | 36,000,000 | 8,000,000 | |||
Shares issued for services | $ 3,600 | $ 800 | |||
Conversion of debt | $ 10,784 | $ 8,847 | |||
Number of common stock shares issued upon conversion | 107,844,363 | 88,463,253 | |||
Equity Purchase Agreement [Member] | |||||
Number of shares purchased for issuance | 5,000,000 | ||||
Agreement terms | Following effectiveness of the Registration Statement, and subject to certain limitations and conditions set forth in the Equity Purchase Agreement, the Company shall have the discretion to deliver put notices to Oasis and Oasis will be obligated to purchase shares of the Company's common stock, par value $0.0001 per share (the "Common Stock") based on the investment amount specified in each put notice. The maximum amount that the Company shall be entitled to put to Oasis in each put notice shall not exceed the lesser of $1,000,000 or one hundred percent (100%) of the average daily trading volume of the Company's Common Stock during the ten (10) trading days preceding the put. Pursuant to the Equity Purchase Agreement, Oasis and its affiliates will not be permitted to purchase and the Company may not put shares of the Company's Common Stock to Oasis that would result in Oasis's beneficial ownership of the Company's outstanding Common Stock exceeding 9.99%. The price of each put share shall be equal to eighty five percent (85%) of the Market Price (as defined in the Equity Purchase Agreement). Puts may be delivered by the Company to Oasis until the earlier of (i) the date on which Oasis has purchased an aggregate of $5,000,000 worth of Common Stock under the terms of the Equity Purchase Agreement, (ii) March 22, 2022, or (iii) written notice of termination delivered by the Company to Oasis, subject to certain equity conditions set forth in the Equity Purchase Agreement. In connection with its entry into the Equity Purchase Agreement and the Registration Rights Agreement, the Company agreed to issue Commitment Shares (as defined in the Equity Purchase Agreement) to Oasis. | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Chief Financial Officer (CFO) [Member] | |||||
Shares issued for services, shares | 26,000,000 | ||||
Shares issued price per share | $ 0.004 | ||||
Shares issued for services | $ 104,000 | ||||
Conversion of debt | $ 1,800,000 | ||||
Employee [Member] | |||||
Shares issued for services, shares | 10,000,000 | ||||
Shares issued price per share | $ 0.004 | ||||
Shares issued for services | $ 40,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Apr. 20, 2017 | |
Due to related parties | $ 1,814 | $ 1,814 | ||
Note payable - related party | 52,000 | 52,000 | ||
Repayments of note payable | 48,563 | $ 118,877 | ||
Purchase Agreement [Member] | ||||
Note payable - related party | 766,000 | 778,000 | $ 830,000 | |
Repayments of note payable | 12,000 | |||
Chief Executive Officer [Member] | ||||
Due to related parties | $ 1,814 | $ 1,814 |
Barter Revenue (Details Narrati
Barter Revenue (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Barter revenue | $ 625,581 | $ 1,201,130 |
Barter Revenue [Member] | ||
Barter revenue |
Accrued Payroll Taxes (Details
Accrued Payroll Taxes (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Unpaid payroll taxes current and noncurrent | $ 96,000 | |
Payroll taxes current | 81,000 | $ 40,000 |
Unpaid payroll taxes includes interest and penalties | $ 15,000 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Leases, term | 4 years | |
Leases, Expiration date | Mar. 31, 2019 | |
Leases, extension description | Prior to the expiration of the lease, the Company executed an extension for 60 days which began April 1, 2019, and continues until the Company provides an advance 30-day termination notification. | |
Monthly rent expense for extension | $ 12,319 | |
Rent expense | $ 34,113 | $ 34,114 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 1 Months Ended | 3 Months Ended | ||
May 15, 2019USD ($)Integer$ / sharesshares | Mar. 31, 2019USD ($)$ / shares | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Accrued interest | $ 100,540 | $ 97,000 | ||
Shares issued for services | 144,000 | $ 72,000 | ||
Convertible Notes Payable [Member] | ||||
Accrued interest | $ 17,341 | |||
Convertible Notes Payable [Member] | Minimum [Member] | ||||
Debt conversion price per share | $ / shares | $ 0.0018 | |||
Convertible Notes Payable [Member] | Maximum [Member] | ||||
Debt conversion price per share | $ / shares | $ 0.0023 | |||
Subsequent Event [Member] | ||||
Original issue of discount percentage | 5.00% | |||
Convertible promissory note | $ 240,000 | |||
Debt maturity term | 1 year | |||
Percentage of convertible debenture converts at lower price rate | 60.00% | |||
Convertible debenture trading price period | Integer | 30 | |||
Subsequent Event [Member] | Convertible Notes Payable [Member] | ||||
Convertible promissory note | $ 100,000 | |||
Number of common stock shares issued upon conversion | shares | 64,226,044 | |||
Accrued interest | $ 34,000 | |||
Subsequent Event [Member] | Convertible Notes Payable [Member] | Minimum [Member] | ||||
Debt conversion price per share | $ / shares | $ 0.00204 | |||
Subsequent Event [Member] | Convertible Notes Payable [Member] | Maximum [Member] | ||||
Debt conversion price per share | $ / shares | $ 0.00216 |